Senate File 273 - Introduced
SENATE FILE
BY BOLKCOM, DEARDEN, SENG,
KREIMAN, DVORSKY, BEALL,
CONNOLLY, FRAISE, QUIRMBACH,
KIBBIE, BLACK, COURTNEY,
SCHOENJAHN, WOOD, and RAGAN
(COMPANION TO LSB 2581HH
BY PETERSEN)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the sale, issuance, and redemption of gift
2 certificates including providing for abandonment, establishing
3 restrictions on fees and charges, prohibiting expiration dates
4 and other restrictive terms, and making penalties applicable.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 2581SS 81
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PAG LIN
1 1 Section 1. NEW SECTION. 537.3312 GIFT CERTIFICATES ==
1 2 FEES == EXPIRATION DATES == VIOLATIONS.
1 3 1. A gift certificate shall be redeemable for its full
1 4 value. A seller, issuer, or holder of a gift certificate may
1 5 not do any of the following:
1 6 a. Assess, charge, or deduct a fee or other charge from or
1 7 with respect to a gift certificate.
1 8 b. Sell or issue a gift certificate that includes, bears,
1 9 or is otherwise subject to an expiration date.
1 10 c. Impose any other term or condition on a gift
1 11 certificate that would limit the ability of the owner to
1 12 redeem the gift certificate for its full value or receive cash
1 13 for any remaining unredeemed value at the time of redemption.
1 14 2. If a gift certificate is not redeemed within three
1 15 years after the later occurrence of either the date of the
1 16 certificate's purchase or issuance, or the date of the last
1 17 transaction by the owner that increased or decreased the value
1 18 of the certificate, the gift certificate is presumed abandoned
1 19 under chapter 556.
1 20 3. A violation of this section is an unlawful practice
1 21 under section 714.16.
1 22 4. As used in this section, "gift certificate" means the
1 23 same as defined in section 556.1.
1 24 Sec. 2. Section 537.5201, subsection 1, is amended by
1 25 adding the following new paragraph:
1 26 NEW PARAGRAPH. rr. Prohibitions regarding gift
1 27 certificates under section 537.3312.
1 28 Sec. 3. Section 556.1, Code 2005, is amended by adding the
1 29 following new subsection:
1 30 NEW SUBSECTION. 4A. "Gift certificate" means a writing,
1 31 instrument, record, or other tangible medium of expression
1 32 generally purchased by a buyer for use by a person other than
1 33 the buyer, or for use by the buyer at a later date, for the
1 34 purchase of goods, property, services, or other consideration
1 35 sold or provided by the seller or issuer and includes but is
2 1 not limited to all of the following:
2 2 a. An electronic card with a stored or banked dollar
2 3 value.
2 4 b. A merchandise credit.
2 5 c. A certificate or card exchangeable for the full face
2 6 value of a future purchase or delivery of goods, property,
2 7 services, or any other consideration.
2 8 d. Any other medium that evidences a grant of
2 9 consideration in exchange for the right to redeem the
2 10 certificate for goods, property, services, credit, or money of
2 11 at least an equal value of the certificate.
2 12 Sec. 4. Section 556.9, subsection 2, Code 2005, is amended
2 13 by striking the subsection and inserting in lieu thereof the
2 14 following:
2 15 2. A gift certificate is presumed abandoned if not
2 16 redeemed within three years after the later occurrence of
2 17 either the date of the certificate's purchase or issuance, or
2 18 the date of the last transaction by the owner that increased
2 19 or decreased the value of the certificate.
2 20 EXPLANATION
2 21 This bill relates to the redemption, sale, and issuance of
2 22 gift certificates. The bill provides a definition of "gift
2 23 certificate" which includes a writing or instrument usable for
2 24 the purchase of goods, property, or services sold or provided
2 25 by the seller or issuer of the gift certificate. The bill
2 26 provides that gift certificates shall be considered abandoned
2 27 property under Code chapter 556 if the gift certificate is not
2 28 redeemed within three years after the later of the date the
2 29 gift certificate was purchased or issued or the date of the
2 30 last transaction using the gift certificate. Abandoned
2 31 property is required to be annually reported to the state
2 32 treasurer who publishes a list of the abandoned property for
2 33 public view.
2 34 The bill provides, in new Code section 537.3312, that a
2 35 gift certificate shall be redeemable for its full value and
3 1 prohibits a seller, issuer, or holder of a gift certificate
3 2 from assessing any fee or charge against the value of a gift
3 3 certificate or selling or issuing a gift certificate with an
3 4 expiration date. The bill also prohibits a seller, issuer, or
3 5 holder from imposing any other term or condition that limits
3 6 the ability of the owner to redeem the gift certificate for
3 7 its full value, including the ability to receive cash for the
3 8 unredeemed value of the gift certificate. A person who
3 9 assesses a fee or charge, issues a gift certificate with an
3 10 expiration date, or imposes any other term limiting the
3 11 redemption of the certificate in violation of new Code section
3 12 537.3312 commits a consumer fraud under Code section 714.16
3 13 and may be subject to civil penalties and a civil action
3 14 brought by the attorney general for damages incurred as a
3 15 result of the violation. A person in violation of new Code
3 16 section 537.3312 is also subject to a civil action brought by
3 17 the injured consumer for penalties in an amount not less than
3 18 $100 nor more than $1,000 per violation.
3 19 LSB 2581SS 81
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