2004-06-18 / Community

Pheffer: Cut Hidden Gift Card Costs

Pheffer: Cut Hidden Gift Card Costs

Assemblywoman Audrey I. Pheffer has announced that the Assembly has passed two pieces of legislation that she has worked on throughout the 2004 Legislative Session to protect consumers from hidden and unknown gift card terms and fees.

The bills not only require that the terms and conditions on gift cards and gift certificates be disclosed, but also limit the fees that retailers can charge.

"We have all had some experience with gift cards and gift certificates expiring without our knowledge, or fees and conditions being applied that we only become aware of after purchase," said Pheffer. "With this new legislation, consumers will now have the opportunity to be fully aware of fees and conditions applied to these gift cards and certificates and have the ability to decide prior to purchase whether these terms are acceptable."

A.10333-B would prohibit the assessment of retroactive fees against gift certificates and gift cards. This legislation also prohibits the assessment of monthly service fees until the thirteenth month of dormancy.

The prohibition on fees for the first year of dormancy can be extended for an additional 12 months by the consumer either making a purchase or adding value to the card, which makes the account no longer "dormant."

The companion legislation, A.10334-B would clarify that the definition of gift certificates includes gift cards. It would also require, at the time of purchase, the disclosure of any limitations placed on gift certificates by issuers, including expiration dates, any fees charged against the balance of the gift certificate, and whether a replacement gift certificate will be issued if the gift certificate is lost, stolen, or destroyed. The requirements do not apply to gift certificates that have no terms and conditions.

The bill will also require that terms and conditions of a gift certificate be disclosed on a conspicuously posted sign that states, "TERMS AND CONDITIONS ARE APPLIED TO GIFT CERTIFICATE/GIFT CARDS SOLD HERE" and conspicuously printed on the gift certificate; or an envelope or packaging containing the gift certificate or an additional printed document, provided a toll-free telephone number is printed on the gift certificate.

"I am very pleased that the Senate and Assembly have come together to pass this important legislation, which will provide consumers will full disclosure of any "fine print" and stop issuers from including any hidden fees that prevent consumers from receiving what they paid for," said Pheffer.

The requirements in both bills do not apply to gift certificates sold below face value at a volume discount to employees, to nonprofit and charitable organizations, or educational institutions for fundraising purposes; or distributed by the issuer to a consumer pursuant to awards, loyalty, or promotional programs.

Both of these bills having passed the Assembly and Senate, now await the Governor’s approval.

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