On January 1, 2003 and May 30, 2003, important changes were made to the current Gift Certificate and merchandise credit laws. These changes will go into effect on June 1, 2003. The new law can be found at Chapter 510 of the Acts of 2002 and Chapter 18 of the Acts of 2003.
What Important Changes Does This Law Make To The Current Gift Certificate Law?
|Old Law ||New Law |
- Gift Certificates must be good for at least 2 years.
- Gift Certificates must be good for at least 7 years.
- Gift Certificates were defined as "a writing identified as a gift certificate purchased by a buyer for use by a person other than the buyer not redeemable in cash and usable in its face amount in lieu of cash in exchange for goods or services supplied by the seller."
- The definition of Gift Certificates is expanded to include electronic cards with a banked dollar value, a merchandise credit, a certificate where the issuer has received payment for the full face value for the future purchase or delivery of goods or services and any other medium that evidences the giving of consideration in exchange for the right to redeem the it for goods, food, services, credit or money of at least an equal value. Pre-paid calling arrangements, such as pre-paid phone cards, are not considered Gift Certificates under the law
- Gift Certificates are subject to the abandoned property law after five years of inactivity beyond the life of the certificate
- Gift Certificates are no longer subject to the abandoned property law.
- If a Gift Certificate does not have the expiration date clearly marked on its face, the issuer of the gift certificate shall be punished by a fine of up to three hundred dollars.
- Gift Certificates not clearly marked with both a date of issuance and a date of expiration shall be good forever.
- An electronic gift card with a banked dollar value that is not clearly marked with BOTH the issuance date and expiration date on its face, must have the issuance date and expiration date either:
- Clearly printed on a sales receipt, given to the buyer at the time of sale, OR
- Available through an Internet site or toll-free information telephone line to the buyer or holder of the electronic gift card.
- An electronic gift card is good forever if
- the buyer of the electronic gift card does not receive a printed sales receipt with both the issuance date and expiration date clearly marked on it
- the buyer or holder of the electronic gift card does not have both the issuance date and the expiration date available through an Internet site OR through a toll-free information telephone line.
- Merchants were not required to provide a consumer with cash for the remaining value of the Gift Certificate when only a portion of the certificate has been redeemed.
- If 90% or more of a Gift Certificate has been used or redeemed, a merchant must give the consumer the choice between receiving cash OR maintaining the remaining balance on the Gift Certificate.
- Merchants refusing to redeem a Gift Certificate they have sold before it has reached its lawful expiration date, shall be punished by a fine of not more than three hundred dollars.
- Merchants refusing to redeem a Gift Certificate they have sold before it has reached its expiration date, shall be punished by a fine of not more than three hundred dollars. Also, merchants selling Gift Certificates, which impose a time limit of less than 7 years shall be punished by a fine of not more than $300.
- Merchandise Credits must be redeemable for at least 5 years.
- Merchandise Credits now fall under the definition of Gift Certificates and must be valid for at least 7 years.
When Does The Law Go Into Effect?
The new law became effective on June 1, 2003.
What Happens To Gift Certificates That Were Issued Prior To The Effective Date Of The New Law?
Gift Certificates issued and valid, but not redeemed, as of June 1, 2003, will expire 7 years from the date of issuance.