Chapter 04-604

2004 -- H 8713

Enacted 08/11/04

A N A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- UNFAIR SALES PRACTICES

Introduced By: Representatives Kennedy, Gallison, Winfield, T Brien, and Aubin

Date Introduced: July 30, 2004

It is enacted by the General Assembly as follows:

 SECTION 1. Section 6-13-12 of the General Laws in Chapter 6-13 entitled "Unfair Sales

Practices" as amended by Chapter 548 of the 2004 Public Laws and further amended to read as

follows:

6-13-12. Sales of gift certificates. – “Gift certificate” means a record evidencing a

promise, made for monetary consideration, by the seller or issuer for the record that goods or

services will be provided to the owner of the record to the value shown in the record and includes,

but is not limited to, a record that contains a microprocessor chip, magnetic strip or other means

of storage of information that is pre-funded and for which the value is decremented upon each

use, a gift card, an electronic gift card, stored-value card or certificate, a store card, a prepaid

telephone card, or a similar record or card. Any person, firm, or corporation that sells gift

certificates for any product or merchandise sold by the person, firm, or corporation, shall be

required to record the sales and keep an accurate and complete record of each gift certificate sold.

The record shall include the date of sale, the full value of the certificate, the identification number

assigned by the retailer to the certificate, and the state in which the sale of the certificate took

place. The retailer shall further be required to give to the purchaser of gift certificates exceeding

fifty dollars ($50.00) a written and numbered receipt evidencing the sale of the certificate. It shall

be unlawful for any person, firm, or corporation of any kind to charge additional monthly or

annual service or maintenance fees on gift certificates or to limit the time for the redemption of a

gift certificate or to place an expiration date upon the gift certificate. No gift certificate or any

agreement with respect to such gift certificate may contain language suggesting that an expiration

date may apply to the gift certificate. Any person, firm, or corporation that shall violate the

provisions of this section shall be punished by a fine of not more than two hundred dollars ($200).

Due to the unlimited redemption period, the division of taxation shall not escheat the funds paid

for those unredeemed gift certificates. Any unused portion of a redeemed gift certificate shall be

afforded to the consumer by reissuing the gift certificate for the unused amount or providing cash

where the balance due the consumer is less than one dollar ($1.00). This section shall not apply

to the following:

     (a) General-use prepaid cards issued by a third-party prepaid card issuer which shall

mean plastic cards or other electronic payment devices which are: (1) usable at multiple,

unaffiliated, merchants or service providers and/or at automatic teller machines ("ATMs"); (2)

issued in a requested amount which amount may be, at the option of the issuer, increased to value

or reloaded if requested by the holder; (3) purchased and/or loaded on a prepaid basis by a

consumer and shall not include debit cards linked to a deposit account, or cards purchased by a

business entity; and (4) honored upon presentation by merchants for goods or services, or at

ATMs.

     (b) Gift certificates that are distributed to a consumer pursuant to an awards, loyalty or

promotional program without any money or other thing of value being given in exchange for the

gift certificate by the consumer. Any restrictions or limitations which such gift certificates may

be subject to must be disclosed to the consumer, in writing, at the time the gift certificates are

distributed to the consumer.

(c) Cards used for prepaid wireless telephone services will not be subject to this section

until January 1, 2006. "Prepaid wireless telephone service" means wireless telephone service that

is activated in advance by payment for a finite dollar amount of service or for a finite set of

minutes that terminate either upon use by a customer and delivery by the wireless provider of an

agreed-upon amount of service corresponding to the total dollar amount paid in advance or within

a certain period of time following the initial purchase or activation, unless additional payments

are made.

     SECTION 2. This act shall take effect upon passage.

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LC03814

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