CONSUMER PROTECTION;

OLR Research Report


January 13, 2003

 

2003-R-0042

GIFT CERTIFICATE LAWS IN NEIGHBORING STATES

Daniel Duffy, Principal Analyst

You asked if nearby states have laws regulating the sale of gift certificates.

SUMMARY

Massachusetts, New Hampshire, New York, and Rhode Island all have laws regulating gift certificate sales. Massachusetts sets a minimum redemption period of two years and requires sellers to mark the expiration date on the certificates they sell. New Hampshire prohibits gift certificates worth $ 100 or less from expiring. New York requires the terms of the gift certificate to be clearly and conspicuously printed on the certificate itself. Rhode Island prohibits restaurant gift certificates from expiring and requires sellers to keep gift certificate records for at least two years.

MASSACHUSETTS

Massachusetts requires gift certificates to have (1) a redemption period of at least two years and (2) a clearly marked expiration date on their face. A seller who violates the law is subject to a fine of up to $ 300. The law exempts sales of gift certificates in which the purchaser is not charged until the certificate is used (Mass. Ann. Laws Ch. 266 75C).

NEW HAMPSHIRE

New Hampshire prohibits gift certificates with a value of less than $ 100 from being presumed abandoned and exempts them from the law concerning escheats (A legal concept that transfers abandoned property to the state if certain conditions are met. ) (N. H. Rev. Stat. Ann. 471-C: 16).

NEW YORK

New York requires the terms of a gift certificate to be clearly and conspicuously printed on it. The law prohibits gift certificate sellers from refusing to accept their gift certificates in payment for goods or services bought for personal use if the certificates are presented for redemption within their expiration period and according to their terms. It explicitly applies to goods or services advertised as on sale or being sold as part of a liquidation or closing out sale.

The law authorizes the attorney general to enforce it. A violator is subject to a civil fine of up to $ 1,000 (NY Gen. Bus. Law 396-i).

RHODE ISLAND

Rhode Island requires gift certificate sellers to record the sales and keep an accurate and complete record of the sale for at least two years. The record must include: sale date, certificate value, identification number, and the state of sale. If the certificate’s value is more than $ 50, sellers must give purchasers a written and numbered receipt.

Rhode Island prohibits restaurants and other eating establishments from putting an expiration date on their gift certificates. Due to the unlimited redemption period, the state division of taxation must not escheat the funds paid for unredeemed gift certificates.

A violator is subject to a fine of up to $ 200 (R. I. Gen. Law 6-13-12).

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