Senate Bill 2877

AN ACT TO MAKE UNLAWFUL THE SALE OF A GIFT CERTIFICATE THAT CONTAINS AN EXPIRATION DATE OR A SERVICE FEE, WITH CERTAIN EXCEPTIONS; TO PROVIDE FOR APPLICATION OF THIS SECTION; TO AMEND SECTION 75-24-5, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT VIOLATIONS OF THIS ACT ARE SUBJECT TO CIVIL AND CRIMINAL PENALTIES UNDER THE CONSUMER PROTECTION STATUTES; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) It is unlawful for any person or entity to sell a gift certificate to a purchaser that contains any of the following:

(a) An expiration date.

(b) A service fee, including, but not limited to, a service fee for dormancy, except as provided in subsection (5).

(2) Any gift certificate sold after July 1, 2004, is redeemable in cash for its cash value, or subject to replacement with a new gift certificate at no cost to the purchaser or holder.

(3) A gift certificate sold without an expiration date is valid until redeemed or replaced.

(4) This section does not apply to any of the following gift certificates issued on or after July 1, 2004, provided the expiration date appears in capital letters in at least 10-point font on the front of the gift certificate:

(a) Gift certificates that are distributed by the issuer to a consumer pursuant to an awards, loyalty or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer.

(b) Gift certificates that are sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fund-raising purposes if the expiration date on those gift certificates is not more than thirty (30) days after the date of sale.

(5) Paragraph (b) of subsection (1) does not apply to a dormancy fee on a gift card that meets all of the following criteria:

(a) The remaining value of the gift card is Five Dollars ($5.00) or less each time the fee is assessed.

(b) The fee does not exceed One Dollar ($1.00) per month.

(c) There has been no activity on the gift card for twenty-four (24) consecutive months, including, but not limited to, purchases, the adding of value or balance inquiries.

(d) The holder may reload or add value to the gift card.

(e) A statement is printed on the gift card in at least 10-point font stating the amount of the fee, how often the fee will occur, that the fee is triggered by inactivity of the gift card, and at what point the fee will be charged. The statement may appear on the front or back of the gift card, but shall appear in a location where it is visible to any purchaser prior to the purchase thereof.

(6) Nothing in subsection (1) prevents an issuer of gift certificates from including on any gift certificate a provision that entitles the purchaser to a full refund of the amount that he or she paid for that gift certificate upon the occurrence of the following circumstances:

(a) The gift certificate is purchased as a gift for another person.

(b) The time in which the gift certificate may be redeemed is disclosed on the gift certificate.

(7) This section shall apply only to gift certificates issued on or after July 1, 2004.

SECTION 2. Section 75-24-5, Mississippi Code of 1972, is amended as follows:

75-24-5. (1) Unfair methods of competition affecting commerce and unfair or deceptive trade practices in or affecting commerce are prohibited. Action may be brought under Section 75-24-5(1) only under the provisions of Section 75-24-9.

(2) Without limiting the scope of subsection (1) of this section, the following unfair methods of competition and unfair or deceptive trade practices or acts in the conduct of any trade or commerce are hereby prohibited:

(a) Passing off goods or services as those of another;

(b) Misrepresentation of the source, sponsorship, approval, or certification of goods or services;

(d) Misrepresentation of designations of geographic origin in connection with goods or services;

(e) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he does not have;

(f) Representing that goods are original or new if they are reconditioned, reclaimed, used, or secondhand;

(g) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;

(h) Disparaging the goods, services, or business of another by false or misleading representation of fact;

(i) Advertising goods or services with intent not to sell them as advertised;

(j) Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;

(k) Misrepresentations of fact concerning the reasons for, existence of, or amounts of price reductions;

(l) Advertising by or on behalf of any licensed or regulated health care professional which does not specifically describe the license or qualifications of the licensed or regulated health care professional;

(m) Selling a gift certificate to a purchaser which contains an expiration date, fee or other prohibited condition prescribed in Section 1 of Senate Bill No. 2877, 2004 Regular Session.

SECTION 3. This act shall take effect and be in force from and after July 1, 2004.