S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9900
 
                             I N  S E N A T E
 
                             September 4, 2024
                                ___________
 
 Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the general business law, in relation  to  enacting  the
   "New York gift certificate scam prevention act"
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Short title. This act shall be known and may  be  cited  as
 the "New York gift certificate scam prevention act".
   §  2.  Paragraph  (a) of subdivision 1 of section 396-i of the general
 business law, as amended by chapter 668 of the laws of 2021, is  amended
 to read as follows:
   (a)  For  the purposes of this section, the following terms shall have
 the following meanings:
   (1) "gift certificate" shall mean [a certificate, electronic card,  or
 other  pre-funded  record that: (i) is usable at a single merchant or an
 affiliated group of merchants that share the same name, mark,  or  logo,
 or  is  usable at multiple, unaffiliated merchants or service providers;
 and (ii) is issued in a specified amount; and (iii) may or  may  not  be
 increased in value or reloaded; and (iv) is purchased and/or loaded on a
 prepaid  basis  for  the  future  purchase  or  delivery of any goods or
 services; and (v) is  honored  upon  presentation]  AN  OPEN  LOOP  GIFT
 CERTIFICATE OR A CLOSED LOOP GIFT CERTIFICATE;
   (2) "open loop gift certificate" shall mean a gift certificate redeem-
 able at multiple, unaffiliated merchants or service providers; [and]
   (3)  "CLOSED LOOP GIFT CERTIFICATE" SHALL MEAN A CARD, CODE, OR DEVICE
 THAT IS:
   (I) ISSUED TO A CONSUMER ON A PREPAID BASIS  PRIMARILY  FOR  PERSONAL,
 FAMILY,  OR  HOUSEHOLD  PURPOSES  IN  A  SPECIFIED AMOUNT, REGARDLESS OF
 WHETHER SUCH AMOUNT  MAY  BE  INCREASED  OR  RELOADED  IN  EXCHANGE  FOR
 PAYMENT; AND
   (II)  REDEEMABLE ON PRESENTATION BY A CONSUMER AT A SINGLE MERCHANT OR
 A GROUP OF AFFILIATED MERCHANTS.
   (4) "promotional gift  certificate"  shall  mean  a  gift  certificate
 issued  for  no  consideration  which  includes on the front of the gift
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD16004-02-4
 S. 9900                             2
 
 certificate (i) a statement indicating  that  the  card  is  issued  for
 promotional  purposes  and  (ii)  the expiration date for the underlying
 funds; AND
   (5) "THIRD-PARTY GIFT CERTIFICATE RESELLER" SHALL MEAN A MERCHANT WHO,
 WITHOUT AUTHORIZATION FROM OR AFFILIATION WITH THE BUSINESS ENTITY ISSU-
 ING  AN OPEN LOOP GIFT CERTIFICATE, IS ENGAGED IN THE BUSINESS OF BUYING
 OPEN LOOP GIFT CERTIFICATES OR RESELLING OPEN LOOP GIFT CERTIFICATES  TO
 CONSUMERS.
   § 3. Subdivisions 4, 5, 5-a, 5-b and 6 of section 396-i of the general
 business  law  are  renumbered  subdivisions 5, 6, 7, 8 and 9, and a new
 subdivision 4 is added to read as follows:
   4. (A) FOR AN IN-PERSON SALE OF A GIFT CERTIFICATE, SUCH GIFT  CERTIF-
 ICATE SHALL BE ENCLOSED IN SECURE PACKAGING THAT:
   (I)  IS  SEALED IN A MANNER THAT IS NOT EASILY OPENED WITHOUT SIGNS OF
 TAMPERING;
   (II) EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH (III) OF THIS  PARA-
 GRAPH,  CONCEALS  ALL  NUMERIC  CODES  SPECIFIC TO THE ACTIVATION OR THE
 REDEMPTION OF SUCH GIFT CERTIFICATE, INCLUDING BUT NOT LIMITED  TO,  BAR
 CODES, CVV NUMBERS, PIN NUMBERS, AND ACTIVATION CODES;
   (III)  DISPLAYS AN ACTIVATION CODE, BAR CODE, OR OTHER ACTIVATION DATE
 ONLY IF THE PACKAGING USED IS MORE SECURE THAN IT OTHERWISE WOULD BE  IF
 THE DATA WERE FULLY CONCEALED; AND
   (IV) INCLUDES THE FOLLOWING WARNING OR A SUBSTANTIALLY SIMILAR WARNING
 THAT  STATES THE FOLLOWING LANGUAGE: "DO NOT SELL OR PURCHASE IF PACKAG-
 ING HAS BEEN BROKEN OR INDICATES TAMPERING".
   (B) A MERCHANT MAY SELL A GIFT CERTIFICATE THAT  IS  NOT  ENCLOSED  IN
 SECURE  PACKAGING AS REQUIRED UNDER PARAGRAPH (A) OF THIS SUBDIVISION IF
 (I) SUCH GIFT CERTIFICATE IS A CHIP-ENABLED,  NUMBERLESS  CARD  THAT  IS
 ACTIVATED  BY  A CONSUMER AFTER REGISTERING SUCH GIFT CERTIFICATE ON THE
 ISSUER'S WEBSITE; OR (II) SUCH GIFT CERTIFICATE IS SOLD  EXCLUSIVELY  BY
 SUCH  MERCHANT  OR  A  GROUP OF AFFILIATED MERCHANTS FOR USE ONLY AT THE
 RETAIL ESTABLISHMENTS OF SUCH MERCHANT OR AFFILIATED  MERCHANTS  AND  IS
 SECURED  IN A PHYSICAL LOCATION WITHIN SUCH MERCHANT'S RETAIL ESTABLISH-
 MENT THAT IS ACCESSIBLE ONLY BY AN EMPLOYEE OF SUCH MERCHANT.
   (C) A MERCHANT THAT DISPLAYS A GIFT CERTIFICATE FOR SALE AT  A  RETAIL
 ESTABLISHMENT  SHALL  PROVIDE TRAINING TO ALL EMPLOYEES OF SUCH MERCHANT
 WHOSE DUTIES REGULARLY INCLUDE THE SALE OF OPEN LOOP  GIFT  CERTIFICATES
 AND/OR CLOSED LOOP GIFT CERTIFICATES TO CONSUMERS ON HOW TO IDENTIFY AND
 RESPOND TO GIFT CERTIFICATE SCAMS.
   (D)  (I)  SUBJECT TO THE PROVISIONS OF SUBPARAGRAPH (II) OF THIS PARA-
 GRAPH, WHEN A THIRD-PARTY GIFT CERTIFICATE RESELLER SELLS AN  OPEN  LOOP
 GIFT  CERTIFICATE AS PART OF A TRANSACTION OCCURRING IN THIS STATE, SUCH
 THIRD-PARTY GIFT CERTIFICATE RESELLER SHALL RECORD AND  MAINTAIN  FOR  A
 MINIMUM OF THREE YEARS, A COPY OF THE FOLLOWING:
   (1) THE NAME OF THE PERSON WHO CONDUCTED THE TRANSACTION;
   (2)  THE  NAME,  AGE,  AND ADDRESS OF THE SELLER OF THE OPEN LOOP GIFT
 CERTIFICATE;
   (3) THE SELLER'S AND CONSUMER'S DRIVER'S LICENSE OR OTHER  IDENTIFICA-
 TION CARD NUMBER;
   (4)  A DESCRIPTION OF THE PURCHASED OPEN LOOP GIFT CERTIFICATE INCLUD-
 ING THE RETAILER FOR WHICH SUCH OPEN LOOP GIFT CERTIFICATE  IS  INTENDED
 FOR USE AND SUCH OPEN LOOP GIFT CERTIFICATE'S IDENTIFICATION NUMBER;
   (5) THE SPECIFIC AMOUNT ISSUED ON THE OPEN LOOP GIFT CERTIFICATE;
   (6) THE PRICES PAID TO CONDUCT THE TRANSACTION; AND
   (7) THE SIGNATURE OF THE CONSUMER.
 S. 9900                             3
 
   (II)  (1) THE INFORMATION RECORDED AND MAINTAINED UNDER THIS PARAGRAPH
 SHALL BE RECORDED CHRONOLOGICALLY IN INK WRITING OR LOGGED INTO A SECURE
 DATABASE, SOFTWARE SYSTEM, OR OTHER SIMILAR TECHNOLOGY PLATFORM.  EXCEPT
 AS  PROVIDED  IN  CLAUSE  TWO OF THIS SUBPARAGRAPH, RECORDED INFORMATION
 MADE  IN  INK  WRITING SHALL NOT BE DESTROYED, ALTERED, OR ERASED WITHIN
 THE TIME FRAME SUCH RECORDED INFORMATION IS REQUIRED TO  BE  KEPT  UNDER
 SUBPARAGRAPH (I) OF THIS PARAGRAPH.
   (2) A HANDWRITTEN CORRECTION MAY BE MADE TO AN ENTRY OF INFORMATION BY
 DRAWING  A LINE OF INK THROUGH SUCH ENTRY IN A MANNER THAT RETAINS LEGI-
 BILITY. INFORMATION  RECORDED  UNDER  THIS  SECTION  SHALL  BE  OPEN  TO
 INSPECTION  BY  ANY  DULY AUTHORIZED LAW ENFORCEMENT OFFICER: (A) DURING
 THE ORDINARY BUSINESS HOURS OF THE THIRD-PARTY GIFT CERTIFICATE  RESELL-
 ER; OR (B) AT ANY REASONABLE TIME.
   (3)  A  THIRD-PARTY  GIFT  CERTIFICATE RESELLER, INCLUDING AN AGENT OR
 EMPLOYEE OF SUCH THIRD-PARTY GIFT CERTIFICATE RESELLER, SHALL  NOT:  (A)
 FAIL  TO MAKE AN ENTRY OF OR FALSIFY, DESTROY, OR REMOVE ANY INFORMATION
 REQUIRED TO BE RECORDED AND MAINTAINED UNDER THIS SECTION; (B) REFUSE TO
 ALLOW ANY DULY AUTHORIZED LAW ENFORCEMENT OFFICER TO INSPECT A RECORD OF
 INFORMATION OR OPEN LOOP  GIFT  CERTIFICATE  IN  SUCH  THIRD-PARTY  GIFT
 CERTIFICATE  RESELLER'S POSSESSION DURING THE ORDINARY BUSINESS HOURS OF
 SUCH RESELLER OR AT ANY REASONABLE TIME;  OR  (C)  FAIL  TO  MAINTAIN  A
 RECORD  OF  EACH OPEN LOOP GIFT CERTIFICATE AND TRANSACTION FOR AT LEAST
 THREE YEARS AS REQUIRED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH.
   § 4. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.