SENATE, No. 3498

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED MARCH 9, 2021

 


 

Sponsored by:

Senator  NELLIE POU

District 35 (Bergen and Passaic)

 

 

 

 

SYNOPSIS

     Requires gift card issuer provide certain protections to consumers.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning gift cards and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a.  Every gift card issuer in this State shall:

     (1)   prohibit the use or validation of a gift card worth more than $100 for 48 hours following the purchase or issuance of the gift card;

     (2)   immediately freeze the funds on a gift card upon receiving a report of fraud;

     (3)   provide a full refund to the purchaser after 48 hours of the purchase or issuance of the gift card if fraud is reported by the purchaser within 48 hours of purchase or issuance of the gift card;

     (4)   operate a hotline or an Internet website where a purchaser may report instances of fraud;

     (5)   at the time of purchase or issuance of a gift card, inform the purchaser of its policies regarding gift card fraud and the existence of a hotline or Internet website where the purchaser may report fraud;

     (6)   immediately freeze the funds on a gift card upon receiving a report of fraud; and

     (7) maintain and provide to the purchaser upon request a list of time stamped disbursements of gift card funds if any funds were used prior to the purchaser reporting an instance of fraud.

     b.    The provisions of this section shall not be construed to apply to any small business.

     c.     A gift card issuer that violates the provisions of this section shall be subject to a civil penalty of $1,000, which may be collected and enforced by the Director of the Division of Consumer Affairs in the Department of Law and Public Safety in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).

     d.    As used in this section:

      "Gift card" means a tangible device, whereon is embedded or encoded in an electronic or other format a value issued in exchange for payment, which promises to provide to the bearer merchandise of equal value to the remaining balance of the device. 

      “Issuer” means an issuer of a gift card, redeemable for, solely or a combination of, merchandise, services, and cash, that is any person, merchant, vendor, provider, or business association, excluding any small business.

     “Merchandise” means any objects, wares, goods, commodities, services, or anything offered, directly or indirectly, to the public for sale.

     “Purchase or issuance” means a transaction executed by the purchaser of a gift card that increases the value of a gift card.

      “Small business” means a business entity that is independently owned and operated and not dominant in its field, operates primarily within this State, and employs fewer than 100 full-time employees.

 

     2.    This act shall take effect on the first day of the fourth month after enactment. 

 

 

STATEMENT

 

     This bill requires gift card issuers to provide certain protections to consumers.

     Under the provisions of the bill, every gift card issuer in this State is required to:

     (1)   prohibit the use or validation of a gift card worth more than $100 for 48 hours following the purchase or issuance of the gift card;

     (2)   immediately freeze the funds on a gift card upon receiving a report of fraud;

     (3)   provide a full refund to the purchaser after 48 hours of the purchase or issuance of the gift card if fraud is reported by the purchaser within 48 hours of purchase or issuance of the gift card;

     (4)   operate a hotline or an Internet website where a purchaser may report instances of fraud;

     (5)   at the time of purchase or issuance of a gift card, inform the purchaser of its policies regarding gift card fraud and the existence of a hotline or Internet website where the purchaser may report fraud;

     (6)   immediately freeze the funds on a gift card upon receiving a report of fraud; and

     (7)   maintain and provide to the purchaser upon request a list of time stamped disbursements of gift card funds if any funds were used prior to the purchaser reporting an instance of fraud.

     The provisions of this bill do not apply to any small business. The bill defines “small business” to mean a business entity that is independently owned and operated and not dominant in its field, operates primarily within this State, and employs fewer than 100 full-time employees.

     The bill provides that a gift card issuer that violates the provisions of this bill is subject to a civil penalty in the amount of $1,000.