NO. 39. AN ACT RELATING TO GIFT CERTIFICATES.
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 8 V.S.A. chapter 81 is added to read:
Chapter 81. Gift Certificates
§ 2701. DEFINITIONS
As used in this chapter:
(1) “Account” means a demand deposit or share draft (checking) account, savings account, or other comparable consumer asset account (other than an occasional or incidental credit balance in a credit plan) regularly maintained by the consumer at a financial institution or at a credit union.
(2) "Financial institution" means an institution as defined in subdivision 11101(32) of this title.
(3) “Gift certificate” means a record evidencing a promise made for consideration by the seller or issuer of the record that money, goods, or services will be provided to the holder of the record for the value shown in the record. A “gift certificate” includes, but is not limited to, a record that contains a microprocessor chip, magnetic strip, or other means for the storage of information that is prefunded and for which the value is decremented upon each use; a gift card; an electronic gift card; a stored-value card or certificate; a store card; or a similar record or card. A gift certificate does not include an access device such as a debit card, code, or other means of access to a consumer’s account regularly maintained at a financial institution or credit union that may be used by the consumer to access the funds in his or her account to initiate a withdrawal or to initiate an electronic funds transfer from the consumer’s account.
§ 2702. EXPIRATION DATE
A gift certificate sold or offered to be sold shall be valid for not less than three years after its date of issuance. The date of issuance and the expiration date shall be clearly identified on its face, or, if an electronic card with a banked dollar value, clearly printed upon a sales receipt transferred to the purchaser of the electronic card upon the completed transaction, or otherwise made available to the purchaser or holder of the electronic card through means of an internet site or a toll free information telephone line. A gift certificate not clearly marked with an expiration date or for which the expiration date is not otherwise made available as provided in this section shall be deemed to have no expiration date. Following the expiration date of the gift certificate, the unused portion of the gift certificate shall be returned to the holder of the gift certificate, if requested.
§ 2703. PROHIBITED FEES
(a) Dormancy fees, latency fees, issuance fees, redemption fees, or any other administrative fees or service charges in connection with a gift certificate are prohibited.
(b) Notwithstanding subsection (a) of this section, a money transmitter licensed under chapter 79 of this title, financial institution, or credit union may charge a one-time fee upon the issuance of a stored-value card equal to the lesser of:
(1) ten percent of the face amount purchased or added to the
stored-value card; or
§ 2704. REDEMPTION OF GIFT CERTIFICATE FOR CASH
If the remaining value of a gift certificate is less than $1.00, the gift certificate shall be redeemable in cash for its remaining value upon the demand of the holder of the gift certificate.
§ 2705. BALANCE INQUIRY
The issuer of the gift certificate, at the holder’s request, shall inform the holder of the unused balance remaining on the gift certificate and the expiration date of the gift certificate.
§ 2706. PENALTY
(a) The commissioner may impose an administrative penalty of not more than $1,000.00 per violation upon any person who violates any provision of this chapter, any applicable rule, or any order issued by the commissioner, plus the state's costs and expenses for the investigation and prosecution of the matter, including attorney's fees.
(b) The commissioner may order any person to make restitution to any person as a result of a violation of this chapter.
(c) Any gift certificate that contains any provision in violation of this chapter is contrary to public policy, and such provision is void and unenforceable against the holder of the gift certificate.
(d) The powers vested in the commissioner by this chapter shall be in addition to any other powers of the commissioner to enforce any penalties, fines, or forfeitures authorized by law.
(e) The powers vested in the commissioner by this chapter shall be in addition to any other powers or rights of consumers or the attorney general or others under any other applicable law or rule, including without limitation the Vermont consumer fraud act and any applicable rules issued in connection therewith.
§ 2707. EXEMPTION
The provisions of this chapter shall not apply to the following:
(1) A gift certificate issued pursuant to an awards or loyalty program where no money or other thing of value is given in exchange for the gift certificate, provided that the expiration date is clearly and legibly disclosed on the gift certificate.
(2) A gift certificate donated to a charitable organization and used for fund-raising activities of a charitable organization, without any money or other thing of value being given in exchange for the gift certificate by the charitable organization, provided that the expiration date is clearly and legibly printed on the gift certificate.
(3) Prepaid calling cards issued solely to provide an access number and authorization code for prepaid calling services.
(4) A gift certificate for a food product, provided the expiration date is clearly and legibly printed on the front or the face of the gift certificate or printed on the back of the gift certificate in at least 10-point font.
(5) A season pass, a discount ski card, or a record sold for admission to any seasonal recreational activity.
§ 2708. INVESTIGATIONS AND COMPLAINTS; POWERS OF
If the commissioner has reason to believe that any person has violated any of the provisions of this chapter, the commissioner may make such investigation as the commissioner shall deem necessary, and, to the extent necessary for this purpose, the commissioner’s authorized representative may examine such person and shall have the power to compel the production of all relevant books, records, and documents.
§ 2709. VERMONT CONSUMER FRAUD ACT
(a) A violation of this chapter shall be deemed also a violation of the Vermont consumer fraud act, chapter 63 of Title 9, provided that the commissioner's determinations concerning the interpretation and administration of the provisions of this chapter and any rules adopted under this chapter shall carry a presumption of validity as to financial institutions, credit unions, and all persons licensed or required to be licensed under this title.
(b) A consumer may bring a private action under this chapter or under chapter 63 of Title 9 for any violation of this chapter.
§ 2710. ENFORCEMENT
(a) The commissioner may enforce compliance with the requirements of this chapter with respect to financial institutions as defined in subdivision 11101(32) of this title, credit unions, and all persons and entities licensed or required to be licensed under this title.
(b) The attorney general shall cooperate and consult with the commissioner prior to the commencement of any investigation or enforcement action with respect to any person or entity described in subsection (a) of this section.
(c) Nothing contained in subsection (a) or (b) of this section shall prohibit the commissioner and the attorney general from bringing a joint enforcement action against any person or entity described in subsection (a) for a violation of this chapter.
§ 2711. RULES
(a) The commissioner may adopt such rules as are necessary to carry out the purposes of this chapter with respect to financial institutions, credit unions, and all persons and entities licensed or required to be licensed under this title.
(b) The attorney general may adopt such rules as are necessary to carry out the purposes of this chapter with respect to all persons and entities other than financial institutions, credit unions, and all persons or entities licensed or required to be licensed under this title.
Approved: June 2, 2005
The Vermont General Assembly
115 State Street