House File 600 - Introduced
HOUSE FILE
BY PETERSEN, KURTENBACH,
OLDSON, and DOLECHECK
(COMPANION TO LSB 2581SS
BY BOLKCOM)
Passed House, Date Passed Senate, 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 2581HH 81
7 kk/gg/14
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 2581HH 81
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