Leawood, Kan. – March 29, 2024: Earlier this month the legislative session ended for the state of Washington, thus preventing any further action regarding two separate bills that were filed with both the Senate and the House concerning 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 would have applied to gift cards and gift certificates issued or reloaded with funds on or after July 1, 2024.
As you may recall, concerning the consumer protection legislation, the Senate and House Bills were 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 would have further brought 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 would have proposed 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 have amended 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 have required 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).
As you may recall, the Unclaimed Property Bills, the Senate Bill 5988 and House Bill 2095 were identical. Both proposed 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). The Unclaimed Property Bills would have 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 sought 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 would have included 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” was 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 seemed to require loyalty points where no consideration was provided by the consumer to escheat.
Card Compliant will continue to monitor Washington to see if similar legislation is proposed next year during the legislative session.
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