Leawood, Kan. – January 12, 2024: Last week, two separate bills were prefiled with both the Senate and the House prefiled two separate bills concerning the regulation of gift cards relating to (1) consumer protection (HB 2094 and SB 5987, the “Consumer Protection Bills”) and (2) unclaimed property laws (HB 2095 and SB 5988, the “Unclaimed Property Bills”). If passed, the bills will apply to gift cards and gift certificates issued or reloaded with funds on or after July 1, 2024.
Concerning the consumer protection legislation, the Senate and House Bills are relatively similar with the House Bill being a bit more expansive on the definition of gift card. Changes proposed by the House Bill includes expanding the definition of gift card to include digital cards and a gift card that “stores loyalty points or allows customers to earn loyalty points.” H.B. 2094, Sec. 2(1)(a)(2). It further brings gift card under the definition of gift certificate. H.B. 2094, Sec. 2(2)(a).
In addition to that change by the House, both the Consumer Protection Bills propose a significant increase to the cash back threshold to consumers, raising it from less than five dollars ($5.00) to less than fifty dollars ($50.00). SB 5987, Sec. 2(3); H.B. 2094, Sec. 3(3). Additionally, both Consumer Protection Bills would amend the consumer protection statute to require the issuer to allow consumers with reloadable cards to reload the card at any dollar amount up to the maximum set by the issuer, and would require the issuer to allow the consumer to complete the gift card purchases by utilizing a second form of payment in conjunction with the gift card if the cost of the purchase exceeds the gift card balance. SB 5987, Sec. 2(5) and (6); H.B. 2094, Sec. 3(5) and (6).
The Unclaimed Property Bills, the Senate Bill 5988 and House Bill 2095 are identical. Both propose a monumental shift by requiring the gift cards to escheat 100% to the state after three years. SB 5988, Sec. 4; H.B. 2095, Sec. 4. Currently, Washington has an exemption for closed loop gift cards that do not expire or have a dormancy fee. RCWA 63.30.010(24)(c)(iv). As currently written, the Unclaimed Property Bills specifically exempt businesses whose total revenue is less than $100,000,000 in the prior fiscal year. SB 5988, Sec. 4(7); H.B. 2095, Sec. 4(7).
The Unclaimed Property Bills also seek to expand the definition of the properties subject to escheat by amending the definition of gift certificate or card to include loyalty points. Specifically, gift certificates include a certificate or card that “stores, or allows customers to earn, loyalty points.” SB 5988, Sec. 2(11); H.B. 2095, Sec. 2(11). “Loyalty points” is defined as “a benefit to a consumer without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate, or promotional program that may be used or redeemed only to obtain goods or services or a discount on goods or services.” SB 5988, Sec. 2(34); H.B. 2095, Sec. 2(34). Thus, the Unclaimed Property Bills, as currently written, would seem to require loyalty points where no consideration was provided by the consumer to escheat.
Card Compliant will continue to monitor Washington for the proposed legislation and provide updates as we receive them.
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