ENGROSSED

Senate Bill No. 780

(By Senators Kessler, Dempsey, Fanning, Foster, Hunter, Jenkins, Oliverio, Barnes, Caruth, Deem, Lanham, McKenzie and Weeks)

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[Originating in the Committee on the Judiciary;


reported February 24, 2006.]

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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §46A-6L-1, §46A-6L-2, §46A-6L-3 and §46A-6L-4, all relating to gift certificates generally; defining terms; prohibiting expiration dates on gift certificates of less than three years; stating exceptions; limiting imposition of various fees and charges which reduce the value of a gift certificate; and imposing penalties.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §46A-6L-1, §46A-6L-2, §46A-6L-3 and §46A-6L-4, all to read as follows:
ARTICLE 6L. GIFT CERTIFICATES.
§46A-6L-1. Definitions.
When used in this article, the following terms have the meanings listed below:
(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 credit union.
(2) "Consumer" means a person who purchases, owns, holds or has the right to use a gift certificate to obtain goods, services, credit, money or anything of value.
(3) "Gift certificate" means a prefunded tangible or electronic record evidencing an agreement by the issuer of the record that goods, services, credit, money or anything of value will be provided to the consumer for the value shown in the record and that the value of the record will be decreased accordingly. "Gift certificate" includes, but is not limited to, a record that contains a microprocessor chip, magnetic chip or other means for the storage of information; a gift card, an electronic gift card, a stored-value card or certificate; a store card; or a similar record or card. "Gift certificate" does not include travelers checks or any access device, such as a debit card, code or other means of access to a consumer's account that may be used by the consumer to access the funds for the purpose of initiating a withdrawal or an electronic funds transfer.
(4) "Person" means a natural person, firm, corporation, trust, partnership, incorporated or unincorporated association and any other legal entity.
§46A-6L-2. Expiration date.
(a) On and after the first day of July, two thousand six, no person may sell a gift certificate with an expiration date of less than three years from the date of issue, except as provided in subsection (c) of this section.
(b) Any expiration date on a gift certificate shall appear on the front of the certificate in capital letters in at least eight- point type.
(c) This section does not apply to gift certificates which are:
(1) Distributed by the issuer without any money or other thing of value being given by the consumer in exchange for the gift certificate or gift card, including, without limitation, awards, loyalty or promotional programs; or
(2) Sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fund-raising purposes and whose expiration date is not less than thirty days after the date of sale.
(d) Any gift certificate sold after the first day of July, two thousand six, is redeemable in cash or by check for its cash value or subject to replacement with a new gift certificate, in an amount equal to the amount of the original gift certificate less the amount used, if any, and any fees allowed by law, at the option of the issuer: Provided, That if the remaining value of the gift certificate is less than one dollar, the consumer is entitled to receive the remaining value in cash or by check upon demand.
§46A-6L-3. Fees.
(a) It is unlawful for any person to charge a consumer any dormancy fees, inactivity fees, latency fees, maintenance fees or any other periodic administrative fees or periodic service charges in connection with a gift certificate for a period of one year after the date the certificate was issued.
(b) It is unlawful to charge more than the following amounts
for any dormancy fees, inactivity fees, latency fees, maintenance fees, and any other periodic administrative fees or periodic service charges in connection with a gift certificate:
(1) Three dollars per month for the period beginning the first day of July, two thousand six;
(2) Four dollars per month for the period beginning the first day of July, two thousand eleven; and
(3) Five dollars per month beginning the first day of July, two thousand sixteen, and thereafter.
(c) It is unlawful for any person to fail to disclose to a consumer at the time of issuance of a gift certificate any fees or charges that may be incurred at the time of purchase or later.
§46A-6L-4. Penalties.
Any person who violates the provisions of this article is guilty of an unfair or deceptive act or practice in violation of article six of this chapter and is subject to the penalties contained in section one hundred six, article five of this chapter and section one hundred six, article six of this chapter.