§ 402A. Merchandise certificates and obligations therefor. 1. A
retail seller may issue merchandise certificates to a retail buyer, to
be paid for in instalments and to be used solely in exchange for goods
and services with a cash sale price in the face amount of such
certificates and not redeemable in cash, pursuant to a document executed
by the parties as hereinafter provided, which document, notwithstanding
the definition of obligations contained in subdivision seven of section
four hundred one, shall constitute a retail instalment obligation for
the purpose of this article, shall contain the entire agreement of the
parties, and shall be subject to all of the provisions of sections four
hundred three to four hundred twelve, inclusive, except the provisions
of the second sentence of section four hundred five.

2. On each issue of merchandise certificates, the document evidencing
the obligation therefor shall set forth a legend as provided in
paragraph (a) of subdivision two of section four hundred two, a notice
to the buyer as provided in paragraph (b) of subdivision two of section
four hundred two, the names of the seller and the buyer, the residence
or place of business of the buyer as specified by the buyer, the face
amount of the merchandise certificates issued, and all items required to
be disclosed by the act of congress entitled "Truth in Lending Act" and
the regulations thereunder, as such act and regulations may from time to
time be amended.

3. A seller may, in such a document, contract for and, if so
contracted for charge, receive and collect a credit service charge at
rates not exceeding those provided under section four hundred four of
this article. Such credit service charge shall be computed on the face
amount of merchandise certificates issued to the buyer, less
down-payment, if any.

4. The buyer shall have the right to return to the seller at any time
all merchandise certificates which have not been exchanged for goods and
services, and the seller shall thereupon credit the buyer with the full
face amount of such unused merchandise certificates returned and the
amount of the pro rata credit service charge thereon, which shall be
computed as of the date of issuance of the merchandise certificates so
returned. Where the amount of the refund of such credit charge is less
than one dollar no refund need be made.

5. (a) Merchandise certificates issued under this section or the cover
of the booklet in which they are bound, shall bear:

(i) A legend in at least eight-point bold type stating that the buyer
may return unused merchandise certificates so purchased at any time and
that the seller will give the buyer credit for the full face amount of
any certificates so returned and credit for the pro rata credit service
charge if the same is one dollar or more;

(ii) A legend in at least eight point bold type reading substantially
as follows: If you wish to purchase, with merchandise certificates a
single item of goods or services of greater value than the merchandise
certificates you now hold, you may save credit service charge by
returning your unused merchandise certificates for credit and purchasing
new certificates; and

(iii) In the event the statements required by subparagraphs (i) and
(ii) hereof are set forth on the cover of a booklet in which the
merchandise certificates are bound, each certificate shall bear a
notice, "NOT GOOD IF DETACHED".

(b) If a retail seller issues merchandise gift certificates to a
retail buyer to be paid for in instalments (1) in good faith, and (2) in
reliance upon a retail buyers statement that the buyer intends to
transfer it to another as a gift, then such certificate need not set
forth the legends required by subparagraphs (i) and (ii) above; provided
the certificate shall bear the legend "GIFT CERTIFICATE" and the seller
shall give the buyer at the time of issuance of such certificate a
statement, or facsimile of such certificate, which shall identify such
certificate, and shall contain the legend required by subparagraphs (i)
and (ii) above.

6. Notwithstanding the provisions of subdivision three of section four
hundred three of this article, the buyer shall have the right to return
to the holder of a retail instalment obligation executed on or after
October first, nineteen hundred sixty-two, for merchandise certificates,
at any time all merchandise certificates which have not been exchanged
for goods and services, and the holder shall thereupon credit to the
obligation to the extent of the amount owing by the buyer thereon the
full face amount of such unused merchandise certificates returned and
the amount of the pro rata credit service charge thereon, which shall be
computed as of the date of issuance of the merchandise certificates so
returned. Where the amount of the refund of such credit service charge
is less than one dollar no refund need be made.