In recent weeks, both Arizona and Utah have introduced bills seeking to amend certain provisions of their unclaimed property laws relating to gift cards.
Amendments to the law in Arizona only propose changes to gift cards, while the Utah provisions would be amended to include changes to gift cards in addition to stored value cards and 529 college savings plans.
Arizona Introduces Changes to Gift Card Provisions
Introduced in Arizona on January 18, 2018, and amended on February 14, 2018, AZ S 1264 would amend the unclaimed property law to require that all gift cards with an expiration date must clearly and conspicuously show the expiration date on the gift card:
- for paper gift certificates, expiration dates must be disclosed on the front of the gift certificate;
- for gift certificates purchased electronically, expiration dates must be disclosed to the consumer prior to purchase; and
- for gift cards purchased over the phone, expiration dates must be disclosed verbally to consumers prior to purchase.
Under AZ S 1264, the sale of gift cards subject to a fee would also be banned.
These new requirements do not apply to gift cards affiliated with awards, loyalty or promotional programs where no consideration is exchanged for the gift card. Also exempt are gift cards sold to nonprofits or charitable organizations; cards for prepaid telecommunications services; and debit cards connected to a personal bank account or electronic funds transfer.
Gift card funds that have remained inactive or unused for 10 consecutive years would be transmitted to the Department of Revenue for deposit in the state general fund.
Utah to Amend Sections of RUUPA
Update: Enacted on March 26, 2018
Utah S 156, amends certain provisions of the Revised Uniform Unclaimed Property Act (RUUPA) relating to gift cards, payroll cards, stored-value cards and 529 college savings plans.
Definition of Property
The definition of property is expanded to include stored-value cards as well as payroll cards. A payroll card is defined as a record that evidences a payroll card account.
The newly proposed definition of a gift card would be a record that is usable at a single merchant, or a specified group of merchants, which is prefunded prior to use and must be used for the purchases of goods or services.
Stored Value Cards
A stored value card is to be defined as a reloadable or non-reloadable record that has monetary value or value that can be used to purchase or acquire goods or services, obtain cash, or be redeemed for cash value.
The issuer of that card must have a record of the name and last known address of the apparent owner, and the address of the apparent owner must be in Utah.
Stored value cards would not include cards purchased or acquired by an intermediary or other party for resale, sale on consignment, or given as a gift to the card user, if the issuer does not know the name and address of the ultimate buyer or recipient of the card. Also excluded from the definition of stored value cards are loyalty cards, gift cards, and game-related digital content.
Under UT S 156, unredeemed balances of stored-value cards sold or issued after May 8, 2018, would be presumed abandoned 3 years after the date of last indication of interest in the property by the apparent owner.
529 College Savings Plans
The escheatment provision relating to custodial accounts for minors would not apply to 529 college savings plans.
Keane will continue to track and monitor activity regarding unclaimed property gift card and stored value card legislation in Arizona and Utah, as well as all legislative activity on our blog and on our Compliance Portal. We invite you to sign up for our free legislative alerts to receive real-time updates on the latest happenings within the unclaimed property industry.