Just more than a year ago, a Legal Bytes post entitled “Gift Cards: The Chart is Free. It’s Our Experience You Pay For.” gave our readers and visitors a handy chart that listed and briefly summarized the key legal requirements applicable to Gift Cards – those payment instruments that are increasingly blurred with prepaid debit cards, stored value cards, smart or chip-cards, reward cards, discount certificates, and traditional credit, charge and debit cards. Now those of you with gift card programs – or who are thinking about gift card programs – already know there are various state laws and regulations that require certain disclosures, and impose certain restrictions on expiration dates and on the imposition of inactivity fees, not to mention the applicability of escheat and abandoned property laws that may apply on a state-by-state basis.
If you have been coming back to Legal Bytes to keep up with this and other developments in the law of Advertising Technology & Media (“ATM”), you also know that Keri Bruce in Rimon’s ATM practice group posted a report entitled Gift Cards Tag Along with Credit Card Legislation, noting that federal legislative and regulatory requirements will soon apply to gift cards.
Well, with one legislative delay granted by Congress with respect to certain requirements that apply to gift cards issued before April 1, 2010, the law and corresponding regulations have just now gone into effect. Time to update the chart for you loyal readers and to entice new visitors to subscribe via email or RSS Feed to keep up-to-date. As before, the US Gift Card Statutory Chart (Updated) is provided at no cost or obligation. As we have said previously, it’s our experience and skill you pay for, not our ongoing research services in areas where we already remain current for a wide variety of clients.
First, the obligatory disclaimers. No chart can be comprehensive or substitute for actually knowing the statutes and regulations. It is a guide, not an authority, and you should not rely on it for anything other than as a roadmap to proper and thorough legal counsel based on the source material itself. That said, I do not wish to trivialize or minimize its value – it represents the distillation of years and hours of work and effort – a special thanks to Keri Bruce for helping to update it.
We point out, as we did previously, that the chart (with one new and notable exception – keep reading) doesn’t cover state escheat, abandoned or unclaimed property laws that may apply to the “breakage” remaining on unused gift cards. It also does not cover the various requirements and obligations applicable to money transmitters under state law. But it does cover disclosure requirements and expiration date restrictions, as well as various exclusions and exemptions; and, of course, it provides citations to the relevant laws in each jurisdiction. Now about that new and notable exception: the chart does make reference to a recent law enacted in New Jersey and applicable to abandoned property (escheat), which effectively alters the tenor and scope of the New Jersey gift card law. Because of the complexity, Legal Bytes has created a separate post that describes that law in greater detail (see, Gift Cards in New Jersey: It’s Complicated).
The chart provides a handy citation and reference tool for the various gift card and gift certificate laws in the 50 states in the United States and the District of Columbia, and now includes a description of the new federal U.S. requirements that have just gone into effect as a result of the Credit Card Act of 2009. In addition, if you have an interest in this area, you really should go back and read (or re-read) the prior Legal Bytes’ posting since it provides valuable context as online loyalty and promotional programs have proliferated, and as gift and payment instruments are increasingly being scrutinized by regulators and legislators and dealt with by the courts. As this update evidences, the law is dynamically changing, evolving and being re-configured to reflect our inter-connected, digital information age. Whether online or offline, this is a sophisticated regulated category of financial payment services and products; in a complex retail, promotional, loyalty-reward consumer environment; with a large number of possible variations; offered and used across multiple jurisdictions; governed by an even larger number of evolving state (and now federal) laws and regulations – and we haven’t even scratched the surface internationally.
So if you are wondering why we give the chart away for free – don’t wonder too long. If you are in this business and you need help from lawyers who know this area and can provide experienced, practical counsel, contact Joseph I. (“Joe”) Rosenbaum or Keri Bruce, or your favorite Rimon lawyer, all of whom will be happy to help.