Stored Value Cards
The 2005 Regular Session of the Texas Legislature passed Senate Bill (SB) 446. This summary addresses those provisions of the bill that apply to stored value cards issued on or after September 1, 2005.
- A stored value card is not reportable as unclaimed property if (a) the stored value card
has no expiration date and (b) no fees are assessed, other than those permitted under
Section 604.051 of the Business & Commerce Code.
Reasonable fees permitted under Section 604.051 must be disclosed and may only be charged for:
- issuing a card
- adding value to the card
- accessing the card at an unmanned teller machine
- reissuing or replacing the card if it is lost or expired
- If a card has either (a) an expiration date or (b) charges monthly service fees, other than those
permitted under Section 604.051, the net amount is reportable as unclaimed property.
Additional service fees not specifically covered under Section 604.051:
- must be disclosed
- must be reasonable
- may not be assessed until the 13th month after the date the card was sold or issued
- may not be assessed beyond the 36th month of inactivity
- If a card has an expiration date, the balance is presumed abandoned on the earlier of (a) the card expiration date or (b) three years from the issue date, if the card was not used or three years from the last activity date, if the card was used.
- If a card represents wages, the balance is presumed abandoned on the earliest of (a) the card expiration date or (b) one year from the issue date, if the card was not used or one year from the last activity date, if the card was used.
- Disclosure of the following information must be clear, conspicuous and legibly printed.
- expiration date
- expiration policy
- fees (see above)
- other material restrictions
- periodic reduction of the unredeemed value
Note: A stored value card sold without the disclosure as required by this section is valid until redeemed or replaced.
- "Stored value card" means a record that evidences a promise made for monetary consideration by the seller or issuer of the record that goods or services will be provided to the owner of the record in the value shown in the record, that is prefunded, and the value of which is reduced on redemption. The term includes a gift card or gift certificate.
- If a stored value card seller in this state does not obtain or maintain the name and address of an apparent card owner, the address of the apparent owner is considered to be the Austin address of the Texas Comptroller.
- This statute does not apply to stored value cards that are:
- distributed under an awards, rewards, loyalty, incentive, rebate or promotional program
- sold below face value or donated to
- an employee
- a non-profit organization
- an educational institution for fund raising
- issued by a financial institution as financial agent for United States or Texas
- linked to and draws its value solely from a deposit account subject to Chapter 73
- issued as a prepaid calling card
- issued by a licensed air carrier
- The changes in law made by this Act apply only to a stored value card issued or activated on or after the effective date of this Act (9/1/2005). A stored value card issued or activated before the effective date of this Act is governed by the law in effect when the card was issued or activated, and the former law is continued in effect for that purpose.
SB 446 8/24/05