Report Title:

Gift Certificates; Expiration Dates; Fees

Description:

Prohibits expiration dates on gift certificates, except for donated gift certificates. Prohibits dormancy or similar fees. Excludes unredeemed gift certificates as abandoned property under escheat law. (SD1)

THE SENATE

S.B. NO.

2140

TWENTY-SECOND LEGISLATURE, 2004

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to gift certificates.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 481B-13, Hawaii Revised Statutes, is amended to read as follows:

"§481B-13 Gift certificates. (a) Any restaurant or person engaged in the business of offering services or goods for sale at retail may allow customers to purchase gift certificates; provided that the certificate issuer shall [honor the certificate for a period of at least two years from the date of issuance.] not issue a gift certificate that is subject to an expiration date. 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; provided that a gift certificate, issued by the certificate issuer as a donation to a nonprofit organization, may include on its face an expiration date if the certificate states on its face that it was a donation. A gift certificate shall be valid until it is redeemed or replaced. Upon redemption of a gift certificate for at least ninety per cent of its face value, a consumer shall make an election to receive the balance in cash or continue with the gift certificate.

(b) [A certificate issuer shall include the expiration date on the face of any gift certificate that has an expiration date.] A certificate issuer shall not impose a dormancy charge or fee, service charge or fee, abandoned property charge or fee, unclaimed property charge or fee, escheat charge or fee, inactivity charge or fee, or any similar charge, fee, or penalty for inactivity with respect to a gift certificate.

(c) Any violation of subsection (a) or (b) shall constitute an unfair and deceptive act or practice in the conduct of trade or commerce within the meaning of section 480-2.

(d) As used in this section, unless the context requires otherwise:

"Certificate issuer" or "issuer" means a restaurant or a person engaged in the business of offering services or goods for sale at retail who sells gift certificates to customers.

"Gift certificate" or "certificate" [includes any writing for which the certificate issuer has received payment for the full face value of the certificate for future purchases or delivery of goods or services.] means a tangible record evidencing an issuer's agreement to provide goods or services for the value shown in the record, including an electronic card with a banked dollar value, a written certificate where the issuer has received payment for the full face value for the future purchase or delivery of goods or services, and any other medium that evidences the giving of consideration in exchange for the right to redeem the electronic card, certificate, or other medium for goods, food, services, credit, or money of at least an equal value.

(e) Unredeemed gift certificates shall not be deemed abandoned for the purposes of part I of chapter 523A."

SECTION 2. Section 523A-1, Hawaii Revised Statutes, is amended by amending the definition of "intangible property" to read as follows:

"Intangible property" includes:

(1) Moneys, checks, drafts, deposits, interest, dividends, and income;

(2) Credit balances, customer overpayments, [gift certificates,] security deposits, refunds, credit memos, payroll checks, unused airline tickets, and unidentified remittances;

(3) Stocks and other intangible ownership interests in business associations;

(4) Moneys deposited to redeem stocks, bonds, coupons, and other securities, or to make distributions;

(5) Checks payable under the terms of insurance policies; and

(6) Amounts distributable from a trust or custodial fund established under a plan to provide health, welfare, pension, vacation, severance, retirement, death, stock purchase, profit sharing, employee savings, supplemental unemployment insurance, or similar benefits."

SECTION 3. Section 523A-14, Hawaii Revised Statutes, is amended to read as follows:

"[[]§523A-14[]] [Gift certificates and credit] Credit memos. [(a) A gift certificate or a] A credit memo issued in the ordinary course of an issuer's business which remains unclaimed by the owner for more than five years after becoming payable or distributable is presumed abandoned.

[(b) In the case of a gift certificate, the amount presumed abandoned is the price paid by the purchaser for the gift certificate. In the case of a credit memo, the] The amount presumed abandoned is the amount credited to the recipient of the memo."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall be construed to apply prospectively and may not be applied or interpreted to have any effect on or application to any gift certificate issued before the effective date of this Act.

SECTION 6. This Act shall take effect on July 1, 2030.