SF 219

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to consumer protection; regulating gift
certificates and gift cards; providing penalties and
remedies; proposing coding for new law in Minnesota
Statutes, chapter 325E.

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

Section 1.

new text begin [325E.59] GIFT CERTIFICATES AND GIFT CARDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definition of gift certificate or gift
card. new text end

new text begin For purposes of this section and section 325E.60, "gift
certificate" or "gift card" means a prefunded tangible or
electronic record evidencing an issuer's agreement to provide
goods, services, credit, money, or anything of value. The terms
include but are not limited to a tangible card, electronic card,
store-valued card, or certificate or similar instrument, card,
or tangible record that contains a microprocessor chip, magnetic
chip, or other means for the storage of information and for
which the value is reduced upon each use.
new text end

new text begin Subd. 2. new text end

new text begin Prohibited sales. new text end

new text begin It is unlawful for any person
to sell a gift certificate or gift card to a purchaser that
contains:
new text end

new text begin (1) an expiration date; or
new text end

new text begin (2) a service fee, including, but not limited to, a service
fee for dormancy.
new text end

new text begin Subd. 3. new text end

new text begin How redeemed. new text end

new text begin Any gift certificate or gift card
sold on or after August 1, 2005, is redeemable in cash for its
cash value, or subject to replacement with a new gift
certificate or gift card at no cost to the purchaser or holder.
new text end

new text begin Subd. 4. new text end

new text begin Validity. new text end

new text begin A gift certificate or gift card sold
without an expiration date is valid until redeemed or replaced.
new text end

new text begin Subd. 5. new text end

new text begin Nonapplication. new text end

new text begin This section does not apply to
any of the following gift certificates or gift cards issued on
or after August 1, 2005, provided the expiration date appears in
capital letters in at least 10-point font on the front of the
gift certificate or gift card:
new text end

new text begin (1) gift certificates or gift cards that are distributed by
the issuer to a consumer pursuant to an awards, loyalty, or
promotional program without any money or other thing of value
being given in exchange for the gift certificate or gift card by
the consumer; and
new text end

new text begin (2) gift certificates or gift cards that are sold below
face value at a volume discount to employers or nonprofit and
charitable organizations for fund-raising purposes if the
expiration date on those gift certificates or gift cards is not
more than 30 days after the date of sale.
new text end

new text begin Subd. 6. new text end

new text begin Exception. new text end

new text begin Nothing in subdivision 2, clause
(1), prevents an issuer of gift certificates or gift cards from
including on any gift certificate or gift card a provision that
entitles the purchaser to a full refund of the amount that the
purchaser paid for that gift certificate or gift card upon the
occurrence of the following circumstances:
new text end

new text begin (1) the gift certificate or gift card is purchased as a
gift for another person;
new text end

new text begin (2) the time in which the gift certificate or gift card may
be redeemed is disclosed on the gift certificate or gift card;
and
new text end

new text begin (3) the holder of the gift certificate or gift card does
not redeem the gift certificate or gift card within the time
described in clause (2).
new text end

Sec. 2.

new text begin [325E.60] GIFT CERTIFICATE OR GIFT CARD AS
TRUST.
new text end

new text begin (a) A gift certificate or gift card constitutes value held
in trust by the issuer of the gift certificate or gift card on
behalf of the beneficiary of the gift certificate or gift card.
The value represented by the gift certificate or gift card
belongs to the beneficiary, or to the legal representative of
the beneficiary to the extent provided by law, and not to the
issuer.
new text end

new text begin (b) An issuer of a gift certificate or gift card who is in
bankruptcy shall continue to honor a gift certificate or gift
card issued before the date of the bankruptcy filing on the
grounds that the value of the gift certificate or gift card
constitutes trust property of the beneficiary.
new text end

new text begin (c)(1) This section does not alter the terms of a gift
certificate or gift card. The terms of a gift certificate or
gift card may not make its redemption or other use invalid in
the event of a bankruptcy.
new text end

new text begin (2) This section does not require, unless otherwise
required by law, the issuer of a gift certificate or gift card
to:
new text end

new text begin (i) redeem a gift certificate or gift card for cash;
new text end

new text begin (ii) replace a gift certificate or gift card that has been
lost or stolen; or
new text end

new text begin (iii) maintain a separate account for the funds used to
purchase the gift certificate or gift card.
new text end

new text begin (d)(1) This section does not create an interest in favor of
the beneficiary of the gift certificate or gift card in any
specific property of the issuer.
new text end

new text begin (2) This section does not create a fiduciary or
quasi-fiduciary relationship between the beneficiary of the gift
certificates or gift cards and the issuer, unless otherwise
provided by law.
new text end

new text begin (3) The issuer of a gift certificate or gift card has no
obligation to pay interest on the value of the gift certificate
or gift card held in trust under this section, unless otherwise
provided by law.
new text end

Sec. 3.

new text begin [325E.61] PENALTIES AND REMEDIES.
new text end

new text begin Any person found to have violated section 325E.59 or
325E.60 is subject to the penalties and remedies provided in
section 8.31.
new text end