OLR RESEARCH REPORT
January 5, 2004
2004-R-0029
GIFT CARDS
By: Daniel Duffy, Principal Analyst
You asked if the new gift card law (PA 03-01, June Sp. Sess.) applies
to mall gift cards, such as the Simon Visa Gift Card sold by the Crystal
Mall, and credit card related gift cards, such the American Express gift
cards.
The Office of Legislative Research is not authorized to render legal
opinions and this report should not be considered as one.
SUMMARY
Connecticut law, unchanged by the 2003 gift card legislation, provides
that property held or owing in this state and unclaimed after three years
is presumed abandoned. The gift card law establishes provisions specific
to gift cards. It defines a “gift certificate” as a record showing a promise
by the seller or issuer, made for consideration, that goods or services will
be provided to the owner to the value shown in the record.
The websites advertising both the Simon Visa gift card and the
American Express gift card both state that the cards are gift cards and
are not charge cards. The descriptions of both cards appear to fit within
the statutory definition of “gift certificate.” Apparently, the Connecticut
gift card law applies to both.
Mary M. Janicki, Director
Phone (860) 240-8400
FAX (860) 240-8881
http://www.cga.state.ct.us/olr
Connecticut General Assembly
Office of Legislative Research
Room 5300
Legislative Office Building
Hartford, CT 06106-1591
Olr@po.state.ct.us
UNCLAIMED PROPERTY
By law unchanged by the act, property held or owing in this state and
unclaimed after three years is presumed abandoned, unless excluded by
law (CGS § 3-64a). The law establishes the circumstances under which
intangible property is subject to state custody as unclaimed property
(CGS § 3-66b). The holder of such abandoned property must, two years
after the property is unclaimed, notify the property owner that he must
state his interest in the property or it will be sent to the state treasurer.
The notice must be sent by first-class mail to the owner’s last-known
address.
Within 90 days after the close of the calendar year in which the
property is deemed abandoned, the holder must send it to the state
treasurer with a report. The report must state, among other things; (1)
the owner’s name, if known, and address, if any; (2) the name, identifying
number, or description of the property; and (3) the date of the last
transaction with the owner involving the property (CGS § 3-65a).
The treasurer must publish in a newspaper a notice of all unclaimed
property every two years. The notice must include the names and
addresses of the people reported as owners (CGS § 3-66a). Anyone
asserting ownership of the property may make a claim on it with the
state treasurer (CGS § 3-70a).
GIFT CARD LAW
The 2003 legislation established provisions specific to gift cards (PA
03-01, June Sp. Sess.). The act specifies that the value of a gift certificate
is presumed abandoned if it is not redeemed within three years after (1)
its purchase or issuance date or (2) the last date of a transaction that
increased or decreased its value, whichever is later.
The act defines a “gift certificate” as a record showing a promise by
the seller or issuer, made for consideration, that goods or services will be
provided to the owner to the value shown in the record. This includes,
but is not limited to, a (1) record that contains a microprocessor chip,
magnetic stripe, or other means to store information that is prefunded
and for which value is decreased with use; (2) gift card; (3) electronic gift
card; (4) stored value card or certificate; (5) store card; or (6) similar
record or card. The act exempt two types of telephone cards: prepaid
calling cards issued by prepaid calling card companies and prepaid
mobile services cards.
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The act defines a “record” as information inscribed on a tangible
medium or stored in an electronic or other medium and retrievable in
perceivable form.
Dormancy Charges
The act prohibits dormancy charges or fees, abandoned property
charges, unclaimed property charges, inactivity charges, or any similar
charge, fee, or penalty for inactivity on gift cards and certificates.
Further, neither the certificate nor an agreement concerning it may
contain language suggesting that it may be subject to charge.
Expiration Dates Prohibited
The act prohibits anyone from selling or issuing a gift certificate with
an expiration date and prohibits the gift certificate or an agreement from
having language suggesting that an expiration date may apply. A
violation is deemed to be an unfair or deceptive trade practice, which
exposes the violator to civil penalties and liability.
Record-Keeping
The act requires anyone who sells or issues a gift certificate to get and
maintain the owner’s address. If there is no record of the owner's
address, the treasurer's address is used.
Reimbursement to the Holder
The act states that it must not be construed to prevent a holder of
unclaimed property from honoring a gift certificate, the unredeemed
value of which has been sent to the state treasurer, and then seeking
reimbursement from the treasurer.
SIMON VISA GIFT CARD
The Crystal Mall is one of the Simon malls, and the gift card it sells is
the Simon Visa Gift Card. According to the Simon website, the gift card is
a prepaid card that can be used to purchase goods and services in every
store that accepts Visa. A purchaser can buy it in any whole dollar
amount between $25 and $500. The purchaser pays the value of the card
plus $5.95 as a shipping and handling fee. The Frequently Asked
Question page on the Simon website (Simon.com) website states that the
card is not a credit card and that it is a prepaid gift card. The Terms and
Conditions page states, “The Gift Card is neither a credit card not an
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FDIC-insured deposit account…. The Simon Gift Card is an instant-issue
Visa prepaid card.”
AMERICAN EXPRESS GIFT CARD
The American Express gift card is a gift card that consumers can use
to purchase goods and services at retail stores that accept the American
Express charge card. It cannot be used at hotels, airlines, car rental
agencies, gas stations, telecom providers, or at automated teller
machines. The Frequently Asked Question page on the American Express
website (www10.AmericanExpress.com) states that the card is not a
credit card and that it is a prepaid gift card. The Terms and Condition
page states, “It is not a credit card, charge card or debit card.”
DD:eh
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