ARIZONA STATE SENATE

RESEARCH STAFF

FAREED BAILEY

LEGISLATIVE RESEARCH ANALYST

FINANCE COMMITTEE

Telephone: (602) 926 -3171

TO:                  MEMBERS OF THE SENATE

FINANCE COMMITTEE

DATE:            February 12, 2018

SUBJECT:      Strike everything amendment to S.B. 1264, relating to gift cards; dormancy fee; prohibition

______________________________________________________________________________                                                                                                                                                 

Purpose

Prohibits the issuance or sale of gift cards in Arizona that are subject to fees.

Background

Current law requires a gift card that is subject to an expiration date, a fee or both, to clearly and conspicuously disclose the following: 1) the expiration date; and 2) the amount of the fee and when the fee is incurred. Such disclosure must be clearly visible to the consumer before the purchase is made. In cases involving paper gift certificates, expiration date and fee information must be disclosed on the front of the gift certificate (A.R.S.  44-7402).

A fee is defined as any amount or value that is automatically deducted from the gift card amount due to a period of nonuse or inactivity. A gift card is defined as any gift certificate, gift card or electronic gift card or any other medium that is issued or sold after October 31, 2005, for which the issuer has received payment for the full face value or full banked dollar value of the card for the future purchase or delivery of goods or services (A.R.S. 44-7401).

There may be a positive fiscal impact to the state General Fund (GF) as a result of any unused gift card monies that are deposited into the state GF by the Arizona Department of Revenue (DOR) after the 10-year dormancy period prescribed by this legislation.

Provisions

1. Prohibits a person from issuing or selling a gift card in Arizona that is subject to a fee.

2. Requires, notwithstanding any other law, the issuer or seller of a gift card that is inactive or not used for 10 consecutive years to transmit the unused monies remaining on the gift card to DOR for deposit into the state GF.

3. Removes statutory language relating to fee disclosure to consumers.

4. Makes technical and conforming changes.

5. Becomes effective on the general effective date.