A bill entitled the "Fair Gift Card Act".

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Gift Card Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Gift certificate, store gift card, other prepaid 
        cards.--The terms ``gift certificate'', ``store gift card'', 
        and ``general-use prepaid card'' have the following meanings:
                    (A) Gift certificate.--The term ``gift 
                certificate'' means a written promise that is--
                            (i) usable at a single merchant or an 
                        affiliated group of merchants that share the 
                        same name, mark, or logo;
                            (ii) issued in a specified amount and 
                        cannot be increased;
                            (iii) purchased on a prepaid basis in 
                        exchange for payment; and
                            (iv) honored upon presentation by such 
                        single merchant or affiliated group of 
                        merchants for goods or services.
                    (B) Store gift card.--The term ``store gift card'' 
                means a plastic card or other electronic payment device 
                that is--
                            (i) usable at a single merchant or an 
                        affiliated group of merchants that share the 
                        same name, mark, or logo;
                            (ii) issued in a specified amount and may 
                        or may not be increased in value or reloaded;
                            (iii) purchased on a prepaid basis in 
                        exchange for payment; and
                            (iv) honored upon presentation by such 
                        single merchant or affiliated group of 
                        merchants for goods or services.
                    (C) General-use prepaid card.--
                            (i) In general.--The term ``general-use 
                        prepaid card'' means a card or other electronic 
                        payment device issued by a bank or financial 
                        institution, or by a licensed money transmitter 
                        that is--
                                    (I) usable at multiple, 
                                unaffiliated merchants or service 
                                providers, or at automated teller 
                                machines;
                                    (II) issued in a requested amount 
                                whether or not that amount may be, at 
                                the option of the issuer, increased in 
                                value or reloaded if requested by the 
                                holder;
                                    (III) purchased or loaded on a 
                                prepaid basis; and
                                    (IV) honored, upon presentation, by 
                                merchants for goods or services, or at 
                                automated teller machines.
                            (ii) Exception.--The term ``general-use 
                        prepaid card'' does not include a debit card 
                        that is linked to a demand deposit or share 
                        draft account.
                    (D) Exclusion.--The terms ``gift certificate'', 
                ``store gift card'', and ``general-use prepaid card'' 
                do not include a written promise, plastic card, or 
                other electronic device that is--
                            (i) used solely for telephone services; or
                            (ii) associated with a demand deposit, 
                        checking, savings or similar account in the 
                        name of the individual at a bank or financial 
                        institution, and that provides payment solely 
                        by debiting such account.
            (2) Debit card.--The term ``debit card'' has the meaning 
        given that term under section 603(r)(3) of the Fair Credit 
        Reporting Act (15 U.S.C. 1681a(r)(3)).
            (3) Financial institution.--The term ``financial 
        institution'' has the meaning given that term under section 
        603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
            (4) Dormancy fee; inactivity charge or fee.--The terms 
        ``dormancy fee'' and ``inactivity charge or fee'' mean a fee, 
        charge, or penalty for non use or inactivity of a gift 
        certificate, store gift card, or prepaid general-use card.
            (5) Service fee.--The term ``service fee'' means a periodic 
        fee, charge, or penalty for holding or use of a gift 
certificate, store card, or prepaid general use card.
            (6) Licensed money transmitter.--The term ``licensed money 
        transmitter'' means a person who sells or issues payment 
        instruments or engages in the business of receiving money for 
        transmission or transmitting money within the United States or 
        to locations abroad by any and all means, including but not 
        limited to payment instrument, wire, facsimile or electronic 
        transfer.

SEC. 3. REGULATION OF UNFAIR AND DECEPTIVE ACTS AND PRACTICES IN 
              CONNECTION WITH GIFT CARDS.

    (a) Imposition of Fees or Charges.--
            (1) In general.--Except as provided for in paragraphs (2), 
        (3), and (4) it is unlawful for any person to impose with 
        respect to a gift certificate, store gift card, or general-use 
        prepaid card a dormancy fee, inactivity charge or fee or a 
        service fee.
            (2) Exception.--A dormancy fee, inactivity charge or fee, 
        or service fee described in paragraph (1) may be charged with 
        respect to a gift certificate, store gift card, or general-use 
        prepaid card if--
                    (A) at the time the charge or fee is assessed the 
                certificate or card has a remaining value of $5 or 
                less;
                    (B) the charge or fee does not exceed $1;
                    (C) there has been no activity with respect to the 
                certificate or the card for at least 24 consecutive 
                months;
                    (D) the holder of the certificate or the card may 
                reload or add value to the certificate or the card; and
                    (E) the requirements of paragraph (3) are met.
            (3) Requirements.--The requirements of this paragraph are 
        that--
                    (A) the certificate or card clearly and 
                conspicuously states in 10-point font--
                            (i) that a charge or fee described in 
                        paragraph (1) may be charged; and
                            (ii) the amount of the charge or fee, how 
                        often the charge or fee may be assessed, and 
                        that the charge or fee may be assessed for 
                        inactivity; and
                    (B) the issuer of the certificate or card informs 
                the purchaser of the charge or the fee before the 
                certificate or card is purchased, regardless of whether 
                the certificate or card is purchased in person, over 
                the Internet, or by telephone.
            (4) Exclusion.--The prohibitions and requirements contained 
        in this subsection shall not apply to gift certificates that--
                    (A) are distributed pursuant to an award, loyalty, 
                or promotional program and with respect to which there 
                is no money or other value exchanged; or
                    (B) expire not later than 30 days after the date 
                they are sold and are sold below the face value of the 
                certificate to an employer, or to a nonprofit or 
                charitable organization for fundraising purposes.
    (b) Limitations on Expiration Date.--
            (1) In general.--Except as provided in paragraph (2), it is 
        unlawful for any person to sell or issue a gift certificate, 
        store gift card, or general-use prepaid card that is subject to 
        an expiration date.
            (2) Exceptions.--A gift certificate, store gift card, or 
        general-use prepaid card may contain an expiration date if the 
        expiration date is not less than 5 years from the date the card 
        is purchased. Expiration terms must be prominently disclosed in 
        at least 10-point font and in all capital letters.

SEC. 4. RELATION TO STATE LAWS.

    The Act and any regulations or standards established pursuant to 
this Act shall not supersede any State law or regulation with respect 
to charges, fees, and expiration dates of gift certificates, store gift 
card, or general-use prepaid cards.

SEC. 5. ENFORCEMENT.

    (a) Unfair or Deceptive Act or Practice.--A violation of this Act 
shall be treated as a violation of a rule defining an unfair or 
deceptive act or practice prescribed under section 18(a)(1)(B) of the 
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
    (b) Actions by the Commission.--The Federal Trade Commission shall 
enforce this Act in the same manner, by the same means, and with the 
same jurisdiction, powers, and duties as though all applicable terms 
and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et 
seq.) were incorporated into and made a part of this Act.
    (c) Individual Cause of Action.--Nothing in this Act shall be 
construed to limit an individual's rights to enforce a State law 
relating to unfair or deceptive acts or practices.

Summary: Fair Gift Card Act - States it is unlawful for any person to impose a dormancy fee, inactivity charge or fee, or a service fee with respect to a gift certificate, store gift card, or general-use prepaid card. Exempts from this prohibition any such charge or fee if: (1) the certificate or card has a remaining value of $5 or less at the time the charge or fee is assessed, (2) the charge or fee does not exceed $1. (3) there has been no activity with respect to the certificate or card for at least the last 24 months. (4) the holder of the certificate or the card may reload or add value to the certificate or the card. And (5) specified charge or fee disclosure requirements have been met. Declares it is unlawful to sell or issue a gift certificate, store gift card, or general-use prepaid card that is subject to an expiration date unless the date is not less than five years from the date the card is purchased and the expiration terms are prominently disclosed in specified font size and in all capital letters. States that a violation of this Act shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under the Federal Trade Commission Act.