Georgia Gift Certificate Standard Act

Did you know it is perfectly legal inb the state of Georgia for a merchant to sell you a gift certificate and then not honor it? Yes, by law, they can expire a gift certificate or gift card. These are not coupons or reward cards, but certificates and cards for which an equivalent amount of cash was exchanged. That means the merchant already has your money, and now won't give you any merchandise.

Only a handful of states have some protection against this. Georgia recently passed a law that compels businesses to clearly identify if they are going to expire a gift certificate/card. That is a good start, but not good enough.

Gift certificates/cards are one of the most popular presents people give each other. It was the number 1 Christmas present of 2004. Imagine giving someone cash and then not having them be able to use it anywhere, that is not a very good present.

Below is a rough draft of legislation which never got a vote in the Georgia State Senate. In basic it reads, if I, as a consumer, pay cash (or cash equivalent) for a gift certificate/gift card, that the merchant must honor that card. If that gift certificate/gift card was a reward for being a good customer, it can still be expired.

I am not trying to hurt businesses by making them keep liabilities on their books, but free cash for which they are earning interest os not a liability in my opinion. Additionally, history shows us that a $50 gift certificate today will buy less in the future.

This legislation may need to be reworded based on legislation passed since this was written.

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A BILL TO BE ENTITLED

AN ACT



To amend Part 2 of Article 15 of Chapter 1 of Title 10 of the Official Code of Georgia Annotated, relating to fair business practices, so as to provide definitions; to declare that on and after January 1, 2005, it shall be unlawful to sell a gift certificate with an expiration date; to provide that no service fees for dormancy can be charged to a gift certificate; to provide for redemption for cash value of gift certificates; to provide exemptions; to provide for refunds; to provide for penalties; to provide for applicability; to provide for related matters; to provide an effective date; to repeal conflicting laws; and for other purposes.



BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:



SECTION 1.

Part 2 of Articles 15 of Chapter 1 of Title 10 of the Official Code of Georgia Annotated, related to fair business practices, is amended by adding a new Code section to read as follows:

10-1-393.8.

(a) As used in this Code section the term:

(1) Gift Card means an electronic card with a banked dollar value, a merchandise credit, a certificate where the issuer has received payment for the full face value for the future purchase or delivery of goods or services, or any other medium that evidences the giving of consideration in exchange for the right to redeem electronic card or other medium for goods, food, services, credit, or money of at least an equal value.

(2) Gift Certificate means a writing identified as a gift certificate purchased by a buyer for use by a person other than the buyer and usable in its face amount in lieu of cash in exchange for goods or services supplied by the seller.

(b) Except as otherwise provided in subsection (e) of this Code section, it shall be unlawful on and after January 1, 2005 for any person or entity to sell a gift certificate to a purchaser that contains any of the following:

(1) An expiration date; or

(2) A service fee, including but not limited to, a service fee for dormancy.

(c) Any gift certificate sold on and after January 1, 2005, is redeemable in cash for its cash value or subject to replacement with a new gift certificate at no cost to the purchaser or holder.

(d) Any gift certificate sold on and after January 1, 2005, without an expiration date is valid until redeemed or replaced.

(e) This Code section does not apply to any of the following gift certificates issued on and after January 1, 2005, provided that an expiration date appears in capital letters in at least ten-point type on the front of the gift certificate:

(1) Gift certificates that are distributed by the issuer 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;

(2) Gift certificates that are sold below face value at a volume discount to employers or to non-profit or charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than 30 days after the date of sale; or

(3) Gift certificates that are issued for food products.

(f) This Code section does not apply to a dormancy fee on a gift card that meets all of the following criteria:

(1) The remaining value of the gift card is $5.00 or less each time the fee is assessed;

(2) The fee does not exceed $1.00 per month;

(3) There has been no activity on the gift card for 24 consecutive months, including, but not limited to, purchases, the adding of value, or balance inquiries;

(4) The holder may reload or add value to the gift card; and

(5) A statement is printed on the gift card in at least ten-point type stating the amount of the fee, how often the fee will occur, that the fee is triggered by inactivity of the gift card, and at what point the fee will be charged. The statement may appear on the front or the back of the gift card but shall appear in a location where it is visible to any purchaser prior to purchase thereof.

(g) An issuer of gift certificates shall include on any gift certificate a provision that entitles the purchaser to a full refund of the amount that he or she paid for the gift certificate if:

(1) The gift certificate is purchased as a gift for another person;

(2) The time in which the gift certificate may be redeemed is disclosed on the gift certificate; and

(3) The holder of the gift certificate does not redeem the gift certificate within the time described in paragraph (2) of this subsection.

(h) Any gift certificate issued before January 1, 2005, shall be governed by the laws in effect at the time of its issuance, including, but not limited to, the provisions of Code Section 44-12-205.

(i) In addition to any other penalty imposed for a violation of this Code section, any person or entity that sells a gift certificate in violation of this Code section shall be liable to the purchaser or holder of the gift certificate in an amount equal to three times the face value of the gift certificate.



SECTION 2.



Said part is further amended in Code Section 10-1-397, relating to penalties for unfair business practices, by striking the introductory language of subsection (a) in its entirety and inserting the following in place thereof:

(a) Whenever it may appear to the administrator that any person is using, has used, or is about to use any method, act, or practice declared by Code Section 10-1-393, 10-1-393.1, 10-1-393.2, 10-1-393.3, 10-1-393.4, 10-1-393.5, 10-1-393.6, or 10-1-393.8 or by regulations made under Code Section 10-1-394 to be unlawful and that proceedings would be in the public interest, whether or not any person has actually been misled, he or she may:



SECTION 3.



This Act shall become effective on January 1, 2005, and shall apply to gift certificates and gift cards issued on or after that date.



SECTION 4.



All laws and parts of law in conflict with this Act are repealed.

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Petition

Yes, I want to see this Bill become a Law