ARIZONA HOUSE OF REPRESENTATIVES

SB 1264: gift cards; dormancy fee; prohibition

PRIME SPONSOR: Senator Yarbrough, LD 17

BILL STATUS: House Engrossed

Abstract

Relating to a gift card expiration date and fee. 

Provisions

1. Prohibits a gift card from being subject to a fee, except as noted.  (Sec. 1)

2. States that the underlying monies on a gift card may not be subject to an expiration date. (Sec. 1)

3. Specifies that a gift card, code or device associated with a gift card may contain an expiration date if:

a. A clear and conspicuous disclosure informs the consumer that the underlying monies do not expire and the consumer may contact the issuer for a replacement card, code or device; and

b. If the gift card is electronic, the disclosure must be in the message to the consumer that contains the card number or code. (Sec. 1)

4. Clarifies that a bank issued debit or reloadable prepaid card, that is not a gift card, may charge a fee.  (Sec. 1)

5. Contains technical changes.  (Sec. 1)

Current Law

Laws 2005, Chapter 315 states that a gift card subject to an expiration date or fee must clearly and visibly disclose the expiration date, the amount of the fee and when the fee is incurred.  The disclosure must be made to the consumer before the purchase and, in the case of a paper certificate, must be disclosed on the front of the certificate.  The disclosure also applies to gift cards purchased electronically or telephonically.  Regardless of the Consumer Fraud Act, statute assesses a civil penalty for a violation is of no more than $500 per card violation.  (A.R.S. § 44-7402)

Statute exempts the following from the regulatory requirements:

1. A gift card received by a consumer as part of an awards, loyalty or promotional program when nothing of value is given by the consumer in exchange for the gift card;

2. A gift card that is donated or sold below face value to a nonprofit or charitable organization for fund raising purposes; and

3. A debit card, prepaid telecommunications services card or an electronic funds transfer card.  (A.R.S. § 44-7402)

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Fifty-third Legislature                  SB 1264

Second Regular Session                               Version 3: House Engrossed

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