Leawood, Kan. – June 20, 2025: With the rise of fraud in the prepaid card industry, several U.S. states have recently enacted or are considering legislation to combat gift card fraud. These laws aim to enhance consumer protection and provide law enforcement with more tools to prosecute such crimes. Below is a summary of notable consumer protection legislative actions implemented at the retail level that are currently being considered by the states, the accompanying bill numbers with a link to the most current version of the bill, a short description of the bill, and its current status.
|
State |
Bill |
Summary |
Status |
|
California |
An act to amend Section 1749.5 of the Civil Code, relating to consumer protection. This bill would make a gift certificate with a cash value of less than $25, redeemable in cash for its cash value and would require an issuer of gift certificates to display at the cash register a notice of the right of the holder to redeem a gift certificate for cash pursuant to that provision. |
On June 6, 2025 this passed the Senate and was referred to the Committee on Privacy and Consumer Protection. |
|
|
California |
Introduced SB 822 (1) adds definition for “Last known address” and “Virtual currency”; (2) provides for a three (3) year abandonment period and outlines due diligence requirements for virtual currency; (3) clarifies that virtual currency is an intangible property; (4) requires holders of virtual currency to transfer the virtual currency in the same type and amount of virtual currency to the Controller’s custodian or as may be designated by regulation; (5) allows for the Controller to determine, at their discretion, that it is not in the state’s interest to take custody of virtual currency; and (6) provides that virtual currency listed on an established crypto currency exchange shall be sold for the price listed on the exchange and outlines sale of other crypto currency. |
On June 6, 2025 this passed the Senate and was referred to the Assembly Judiciary Committee. |
|
|
Illinois |
Creates the Gift Card Scam Prevention Act. Provides that a merchant shall not knowingly sell an open-loop gift card to a consumer unless the merchant satisfies specified requirements. Provides that a third-party gift card reseller that buys or sells an open-loop gift card as part of a transaction occurring in the State shall record and maintain a copy of specified information. Provides for enforcement of the Act by the Attorney General. If passed it would be effective January 1, 2026. |
February 6, 2025 is the last action on this bill, which was referred to the Senate Assignments Committee. | |
|
Illinois |
Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that any gift certificate issued on or after the effective date of the amendatory Act shall be redeemable in cash for its cash value. This does not apply to any of the following gift certificates: (i) Gift certificates that are distributed by the issuer to a consumer pursuant to an awards, loyalty, or promotional program without any money or thing of value being given in direct exchange or solely for the gift certificate by the consumer. (ii) Gift certificates that are sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than 30 days after the date of sale. (iii) Gift certificates that are issued for a food product. |
As of March 31, 2025, this was pending with the Senate Assignments Committee. |
|
|
Maryland |
(SB 665) |
Making certain virtual currency subject to the abandoned property laws in the State; establishing certain provisions to determine certain information about certain apparent owners of abandoned property; altering and establishing certain provisions pertaining to the presumption of abandonment for certain types of property; establishing certain procedures to establish the death of a certain insured or certain annuitant; altering from $100 to $50 the value at which the Comptroller is required to publish a certain notice. |
On May 20, 2025 this was approved by the Governor. Effective October 1, 2025. |
|
New York |
NY A02389 |
Relates to exemptions from sales and use taxes for gift certificates, electronic gift cards and magnetic gift cards. |
On January 16, 2025 this was referred to the Ways and Means Committee |
|
New York |
S704/A07916 |
Enacts the “New York gift certificate scam prevention act” to require certain packaging security and record-keeping requirements for gift certificates by sellers of gift certificates. The law take effect on September 1, 2026. |
On June 5, 2025 this was amended on its third reading with the Senate. |
|
New York |
A bill that relates to cash out requirements for certain prepaid gift cards. Specifically, a gift certificate, other than a promotional gift certificate, with a remaining value of less than ten dollars may be redeemed upon request for its cash value. The law will take effect immediately upon passing. |
On February 24, 2025 this was referred to Consumer Affairs and Protection. |
|
|
New York |
Int. No. 1078 |
Prohibiting the sale of certain gift cards that lack chip-and-PIN technology. This bill would prohibit any person from selling or offering for sale a physical gift card that is usable at multiple affiliated merchants or at multiple unaffiliated merchants unless it is equipped with chip-and-PIN technology. Any person who violates this prohibition would be liable for a civil penalty of not less than $500 nor greater than $1,000 that would be recoverable in a proceeding before the Office of Administrative Trials and Hearings. This takes effect 120 days after it becomes law, |
On October 10, 2024 this was referred to the committee on Consumer and Worker Protection. |
|
New Jersey |
Requires that notice concerning gift card fraud be posted by retail mercantile establishments that sell gift cards to consumers. The notice must be in a conspicuous manner at or near the physical location where gift cards are displayed for sale in the establishment, to caution consumers about gift card fraud and to instruct consumers on steps to take if fraud is suspected. |
On January 27, 2025 the bill was approved by the Assembly Committee. It will next be sent to the House and Senate for debate. | |
|
Pennsylvania |
An Act amending the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law, providing for notice of gift card scams. It requires employee training and for consumers to show ID for gift card purchases and imposing penalties. 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. Employee Training required. Valid photo ID required to purchase a gift card. |
As of June 5, 2025, the House has temporarily postponed consideration of the bill. |
These legislative efforts reflect a growing recognition of the need to address gift card fraud as a serious crime. By implementing preventive measures at the retail level, states aim to reduce the incidence of such fraud and enhance consumer protection. The ongoing development and implementation of these laws indicate a proactive approach to combating these consumer crimes including those that are a significant component of organized crimes. Card Compliant will continue to monitor the progress of these bills and any additional bills introduced.
About the Compliance Libraries:
The Compliance Libraries provide a one stop location for comprehensive information on the laws, rules and standards regulating gift cards. Its range includes federal and state laws, GAAP accounting standards and tax rules along with other helpful items.
For more information visit www.compliancelibraries.com.
CARD Alerts are distributed by Compliance Libraries which is maintained by Card Issuance & Management, Inc., a subsidiary of Card Compliant, LLC.