Leawood, Kan. – April 19, 2024: The Pennsylvania legislature is currently considering House Bill 2186 (“HB 2186”) to amend its Unfair Trade Practices and Consumer Protection Law to require signage at points-of-sale warning of potential scams involving gift cards and requiring retailers to train its employees and managers who are engaged in gift card sales. As described below, the bill further provides for a civil penalty for violations of the provisions. The amendment will become effective 90 days upon passage of the HB 2186. 2024 PA HB 2186 § 2.
Specifically, HB 2186 would require, among other things, that a Retailer “may not sell a gift card or gift certificate to a purchaser unless the retailer has displayed a notice: (1) warning the purchaser about prepaid gift card scams; and (2) instructing the purchaser on what to do if the purchaser suspects the purchaser might be a potential victim of a gift card scam, including contact information for the bureau or local law enforcement.” Id. at § 1, Sec. 9.5 (a)(1)-(2). It also requires the Retailer to “clearly and conspicuously” position the fraud notice “at or near the physical location where gift cards or gift certificates are displayed for sale and at all points of sale.” Id. at § 1, Sec. 9.5 (b).
Under HB 2186, the Retailer is also responsible for training the managers and employees engaged in the sale of gift cards or gift certificates on how to identify and respond to gift card fraud. Id. at § 1, Sec. 9.5 (d). The training shall include the following: “(1) warning signs that a customer is a victim of a gift card-related scam; (2) common types of scams involving gift cards; (3) communication methods for speaking with customers who are exhibiting warning signs of being a victim of gift card scams; (4) to whom suspected gift card scams should be reported; and (5) retailer policies and procedures on handling suspected gift card scams.” Id. at § 1, Sec. 9.5 (d)(1)-(5).
If enacted as currently written, a ”Retailer” subject to HB 2186 is “a business that displays or offers gift cards or gift certificates for sale to the public.” Id. at § 1, Sec. 9.5(g). It specifically excludes from this definition a business that sells gift cards or gift certificates that are valid only at their establishment. Id. at § 1, Sec. 9.5(g)(emphasis added).
HB 2186 defines “gift card” to mean “a plastic card or other electronic payment device that is: (1) usable and honored upon presentation at a single merchant or an affiliated group of merchants that share the same name, mark or logo, or usable at multiple, unaffiliated merchants or service providers for the future purchase or delivery of any goods or services; and (2) issued in a specific prepaid amount regardless of whether it may be increased in value or reloaded.” Id.
It also defines “gift certificate” as a “promise written or printed on paper or a paper product that is: (1) usable and honored upon presentation at a single merchant or an affiliated group of merchants that share the same name, mark or logo, or usable at multiple, unaffiliated merchants or service providers for the future purchase or delivery of any goods or services; and issued in a specific prepaid amount regardless of whether it may be increased in value or reloaded.” Id.
Bureau of Consumer Protection of the Office of Attorney General (the “Bureau”) is responsible for creating a model notice with the specifications of the HB 2186 and make the notice accessible to retailers on the Bureau’s website. Id. at § 1, Sec. 9.5(c). The Bureau is also tasked with developing and making available to Retailers a model training program for identifying and responding to gift card fraud. Id. at § 1, Sec. 9.5(e).
Enforcement of the law is also with the Bureau. The first level of enforcement by the Bureau is a written notice informing the Retailer to comply with the law and to provide within 30 days of the notice documentation of the corrective action. Id. at § 1, Sec. 9.5(f)(1)-(2). Subsequent failures by the Retailer to comply can result in civil penalties ranging from no more than $500 to $1000, depending on the number of violations. Id. at § 1, Sec. 9.5(f)(3)-(5).
On April 8, 2024, this bill was referred to the Consumer Protection, Technology and Utilities committee for discussion.
To read Pennsylvania HB 2186 click here: Pennsylvania House Bill 2186.
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