2023 New York Laws › GBS - General Business › Article 26 - Miscellaneous › 396-I - Acceptance of Unexpired Gift Certificates.

§  396-i.  Acceptance  of unexpired gift certificates.  1. (a) For the
purposes of this section, the following terms shall have  the  following
meanings:
(1)  "gift  certificate" shall mean a certificate, electronic card, or
other pre-funded record that: (i) is usable at a single merchant  or  an
affiliated  group  of merchants that share the same name, mark, or logo,
or is usable at multiple, unaffiliated merchants or  service  providers;
and  (ii)  is  issued in a specified amount; and (iii) may or may not be
increased in value or reloaded; and (iv) is purchased and/or loaded on a
prepaid basis for the future  purchase  or  delivery  of  any  goods  or
services; and (v) is honored upon presentation;
(2)  "open  loop  gift  certificate"  shall  mean  a  gift certificate
redeemable at multiple, unaffiliated merchants or service providers; and
(3) "promotional gift  certificate"  shall  mean  a  gift  certificate
issued  for  no  consideration  which  includes on the front of the gift
certificate (i) a statement indicating  that  the  card  is  issued  for
promotional  purposes  and  (ii)  the expiration date for the underlying
funds.
(b) Gift certificate shall  not  include  (i)  an  electronic  payment
device  linked to a deposit account or which is covered by the exclusion
set forth in 15 U.S.C. § 1693 L-1(a)(2)(D)(ii), (ii) a fare payment card
or electronic payment  device  used  to  pay  for  travel  on  a  public
transportation  authority  system,  or  (iii)  prepaid telephone calling
cards regulated under section ninety-two-f of the  public  service  law.
Gift  certificate  also shall not include flexible spending arrangements
as defined in Section 106(c)(2) of the Internal Revenue Code, 26  U.S.C.
§  106(c)(2);  flexible  spending accounts subject to Section 125 of the
Internal Revenue Code, 26 U.S.C.  §  125;  Archer  MSAs  as  defined  in
Section  220(d)  of  the  Internal  Revenue  Code,  26  U.S.C. § 220(d);
dependent care reimbursement accounts subject  to  Section  129  of  the
Internal  Revenue Code, 26 U.S.C. § 129; health savings accounts subject
to Section 223(d) of the Internal Revenue Code, 26 U.S.C. §  223(d),  as
amended  by Section 1201 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, Pub. L. No. 108-173; or similar  accounts
from  which,  under  the  Internal  Revenue  Code  and  its implementing
regulations, individuals may pay medical expenses, health care expenses,
dependent care expenses, or similar expenses on  a  pretax  basis.  Gift
certificate  also  shall  not include a prepaid discount card or program
used to purchase identified goods or services at a price  or  percentage
below  the normal and customary price; provided that any expiration date
of the prepaid discount card or program  is  clearly  and  conspicuously
disclosed.  Gift  certificate  also  shall  not include payroll cards or
other electronic payment devices which are linked to a  deposit  account
and which are given in exchange for goods or services rendered.
1-a.  No  person, firm, partnership, association or corporation who or
which issues gift  certificates  or  store  credits,  or  who  or  which
conducts  a  "closing out sale" or "defunct business sale" as such terms
are defined in section five hundred eighty-one of this chapter,  of  the
merchandise  of  any  such  person,  firm,  partnership,  association or
corporation, shall refuse to  accept  such  gift  certificate  or  store
credit in payment for goods or services used or bought for use primarily
for  personal,  family or household purposes, including, but not limited
to, goods or services advertised on sale or pursuant to a liquidation or
close-out, provided that if the certificates or the terms of  the  store
credits limit the period of time during which they may be used, they are
presented for redemption before the expiration of such period of time.
2.  No  person,  firm,  partnership, association or corporation who or
which issues gift  certificates  or  store  credits,  or  who  or  which

conducts  a  "closing out sale" or "defunct business sale" as such terms
are defined in section five hundred eighty-one of this chapter, shall in
any manner restrict the holder of a gift  certificate  or  store  credit
from  electing  use of such gift certificate or store credit in a manner
not inconsistent with stated terms of such  gift  certificate  or  store
credit,   nor  shall  any  person,  firm,  partnership,  association  or
corporation who or which issues gift certificates or store  credits,  or
who or which conducts a "closing out sale" or "defunct business sale" as
such  terms  are  defined  in  section  five  hundred eighty-one of this
chapter, alter the term of a gift certificate or store credit  after  it
has been issued.
2-a.  (a)  The  terms  and  conditions  of a gift certificate shall be
disclosed to the purchaser:
(i) on a sign conspicuously posted stating "TERMS AND  CONDITIONS  ARE
APPLIED  TO  GIFT CERTIFICATES/GIFT CARDS"; or (ii) conspicuously stated
in an offer made by mail thus: "TERMS AND CONDITIONS ARE APPLIED TO GIFT
CERTIFICATES/GIFT CARDS".
(b) For purchases via electronic, computer, or telephonic  means,  the
statement  "TERMS  AND  CONDITIONS ARE APPLIED TO GIFT CERTIFICATES/GIFT
CARDS" shall be stated prior to the  customer's  purchase  of  the  gift
certificate  or  conspicuously  written  within  the  electronic message
offering a gift certificate for purchase.
(c) All advertisements  or  promotions  for  gift  certificates  shall
include  a  notice  in like or similar term to the following: "TERMS AND
CONDITIONS ARE APPLIED TO GIFT CERTIFICATES/GIFT CARDS".
2-b. (a) No person,  firm,  partnership,  association  or  corporation
shall  sell a gift certificate to a purchaser unless the seller displays
a conspicuous notice at or near where the gift certificate is  displayed
or  at  or  near  the  physical location where the sale occurs, that (i)
cautions the purchaser about prepaid card scams, and (ii) instructs  the
purchaser on what to do if they suspect they might be a potential victim
of such a scam.
(b)  The  consumer  protection  division,  as  established  in section
ninety-four-a of the executive law, shall create a  model  notice  which
sellers  may  use  to  comply  with the requirements of this section and
shall make such notice accessible to sellers including, but not  limited
to, posting such notice on the consumer protection division's website in
a format available for sellers to print and display.
3.  The  terms and conditions of a gift certificate store credit shall
be clearly  and  conspicuously  stated  thereon.  Terms  and  conditions
including,  but not limited to, policies related to refunds, warranties,
changes in terms and  conditions,  the  expiration  date,  if  any,  the
activation  fee,  if  any,  the  procedure for the replacement of a gift
certificate, if  any,  assignment  and  waiver  shall  be  conspicuously
printed: (a) on the gift certificate; or (b) on an envelope or packaging
containing  the  gift  certificate,  provided that a toll free telephone
number to access the additional terms and conditions is printed  on  the
gift  certificate;  or  (c) on an accompanying document, provided that a
toll free telephone number to access the additional terms and conditions
is printed on the gift certificate.
3-a. The requirements of subdivisions two-a and three of this  section
shall not apply to a gift certificate that has no terms and conditions.
3-b.  Subparagraph  (i)  of  paragraph  (a)  of  subdivision two-a and
subdivision five-a of this section shall not apply to gift certificates:
(a) sold below face value or at a volume  discount  to  employees,  to
nonprofit  and charitable organizations, or educational institutions for
fundraising purposes; or
(b) distributed to a consumer  or  employee  pursuant  to  an  awards,
rewards, loyalty, or promotional program without any consideration being
given in exchange for the gift certificate by the consumer or employee.
3-c.  Nothing  in this section shall be construed to prevent unclaimed
funds related to gift certificates from becoming abandoned under section
thirteen hundred fifteen of the abandoned property law.
4. Whenever there shall be a violation of this section, an application
may be made by the attorney general in the name of  the  people  of  the
state of New York to a court or justice having jurisdiction by a special
proceeding  to  issue an injunction, and upon notice to the defendant of
not less than five days, to enjoin and restrain the continuance of  such
violations;  and  if it shall appear to the satisfaction of the court or
justice that the defendant has,  in  fact,  violated  this  section,  an
injunction  may  be  issued  by  such  court  or  justice, enjoining and
restraining any further violation,  without  requiring  proof  that  any
person  has,  in  fact,  been  injured  or  damaged thereby. In any such
proceeding, the court may make allowances to  the  attorney  general  as
provided  in  paragraph  six  of subdivision (a) of section eighty-three
hundred  three  of  the  civil  practice  law  and  rules   and   direct
restitution. Whenever the court shall determine that a violation of this
section  has  occurred, the court may impose a civil penalty of not more
than one thousand dollars for such violation.  In  connection  with  any
such  application,  the attorney general is authorized to take proof and
make a determination of the relevant facts and  to  issue  subpoenas  in
accordance with the civil practice law and rules.
5.  (a) No person, firm, partnership, association or corporation shall
charge or assess, or sell or issue any gift certificate subject to,  any
activation  fee,  retroactive fee, redemption fee, service fee, dormancy
fee, latency fee, administrative fee, handling fee, access fee, periodic
fee, renewal fee, re-loading fee, or any other fee of  any  kind,  other
than  an  open  loop  gift  certificate  subject  to an initial one-time
activation or issuance fee reasonably related to the cost of the  issuer
issuing the open loop gift certificate and which shall in no event be in
excess of nine dollars.
(b)  No  person,  firm,  partnership, association or corporation shall
sell a gift certificate that has a face value or balance  that  declines
as  a  result  of  the  passage  of  time  or  the  dormancy of the gift
certificate.
(c) For the  purposes  of  this  subdivision,  "dormancy"  shall  mean
non-use  of a gift certificate. Use of a gift certificate shall include,
but not be limited to, adding value, or purchases.
5-a. It shall be unlawful for any person  to  sell  or  issue  a  gift
certificate   other  than  a  promotional  gift  certificate  where  the
underlying funds are subject to an expiration date, provided that a gift
certificate may be subject to an expiration date which  is  not  earlier
than  the  later  of  nine  years  after  the  date  on  which  the gift
certificate was issued, or the date on which funds were last loaded. The
terms of expiration of a gift certificate, if any, shall be clearly  and
conspicuously stated on such gift certificate.
5-b. A gift certificate, other than an open loop gift certificate or a
promotional  gift  certificate, with a remaining value of less than five
dollars may be redeemed upon request for its cash value.
6. The provisions of this section shall be exclusive and shall preempt
any provisions of local law, ordinance or code, and  no  locality  shall
impose  requirements that are inconsistent with or more restrictive than
those set forth in this section.