Assigned to FIN &                                                                                                           AS PASSED BY HOUSE

ARIZONA STATE SENATE

Fifty-Third Legislature, Second Regular Session

AMENDED

FACT SHEET FOR S.B. 1264

bank deposits; technical correction

(NOW: gift cards; dormancy fee; prohibition)

Purpose

Prohibits the issuance or sale of gift cards in Arizona that are subject to fees.

Background

Current law requires a gift card that is subject to an expiration date, a fee or both, to clearly and conspicuously disclose the following: 1) the expiration date; and 2) the amount of the fee and when the fee is incurred. Such disclosure must be clearly visible to the consumer before the purchase is made. In cases involving paper gift certificates, expiration date and fee information must be disclosed on the front of the gift certificate (A.R.S.  44-7402).

A fee is defined as any amount or value that is automatically deducted from the gift card amount due to a period of nonuse or inactivity. A gift card is defined as any gift certificate, gift card or electronic gift card or any other medium that is issued or sold after October 31, 2005, for which the issuer has received payment for the full face value or full banked dollar value of the card for the future purchase or delivery of goods or services (A.R.S. 44-7401).

There is no anticipated fiscal impact to the state General Fund (GF) associated with this legislation.

Provisions

1. Prohibits a gift card from being subject to a fee.  

2. Prohibits the underlying monies on a gift card from being subject to an expiration date.

3. Allows a gift card to contain an expiration date with respect to the gift card, a code or device associated with the gift card, but not with respect to the underlying gift card monies in the following circumstances:

a) if the gift card contains a clear and conspicuous disclosure that the underlying monies do not expire and that the consumer may contact the issuer for a replacement gift card, code or device; or

b) if the gift card is electronic, the disclosure must be in the consumer message that contains the gift card number or code.

4. Clarifies that a fee may be charged for an electronic funds transfer card, a bank-issued debit or general purpose reloadable prepaid card that is not a gift card or gift certificate.

5. Makes technical and conforming changes.

6. Becomes effective on the general effective date.

Amendments Adopted by Committee

· Adopted the strike everything amendment.

Amendments Adopted by Committee of the Whole

1. Prohibits gift cards with expiration dates or fees and provides exceptions to the prohibition.

2. Removes the requirement that a gift card issuer or seller transmit any unused monies remaining on a gift card after 10 consecutive years of inactivity to the Department of Revenue for GF deposit.

3. Makes technical changes.

Amendments Adopted by the House of Representatives

1. Prohibits underlying gift card monies from being subject to an expiration date.

2. Specifies that an electronic gift card may contain an expiration date if a consumer disclosure requirement is met.

3. Clarifies which types of cards may be subject to a fee. 

4. Makes technical and conforming changes.

Senate Action House Action

FIN                 2/14/18     DPA/SE     6-1-0                COM               3/13/18     DPA     9-0-0-0

3^rd Read          2/26/18                        29-0-1             3^rd Read          4/9/18                    56-0-4

Prepared by Senate Research

April 9, 2018

FB/lb