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House passes bill banning short expiration periods on many gift certificates; financial institutions carved out
Summary
First Substitute House Bill 261 passed 43–30 after an amendment excluding financial institutions and narrowing covered certificates to those involving consideration (cash or equivalent). Sponsor said the change aligns consumer protection with the five-year unclaimed-property rule.
The Utah House on Feb. 25 passed First Substitute House Bill 261, a consumer-protection measure that limits short expiration periods on many gift certificates and similar instruments. Representative McCartney, the bill sponsor, said the bill keeps the consumer’s cash valid for up to five years in line with current unclaimed-property practice and that the amendment he offered explicitly excludes financial institutions and their affiliates from the bill’s coverage.
"All my bill does is say a business may not have a gift certificate expire within that 5 year period," McCartney told colleagues, pointing to text in the bill that defines "gift certificate" to include certificates, electronic cards or other media evidencing the giving of consideration in exchange for the right to redeem. He said national model legislation had been expected but was not available when he reintroduced the measure, which he ran previously.
Members asked detailed questions about what kinds of promotional items the bill would cover. McCartney repeatedly distinguished between true gift certificates—where the purchaser gives consideration, such as cash or credit—and marketing giveaways that convey no consideration and therefore are not treated as gift certificates. He said the amendment was designed to address industry concerns and to align the bill with the existing statutory framework for abandoned property.
Representative Steiler moved the previous question to end debate, and after a brief summation by the sponsor the House voted. The reading clerk announced that First Substitute House Bill 261 received 43 yes votes and 30 no votes; the bill passed the House and will be forwarded to the Senate for further consideration.
The transcript records industry opposition noted on a circulated list (including the Utah Bankers Association and credit-union and financial-services groups) before the amendment; the sponsor said the amendment carved out depository institutions and affiliates to address that concern. Questions from members focused on examples—restaurant coupons, airline blackout periods and promotional resort cards—and the sponsor said the bill’s application depends on whether a consideration was exchanged and on specific contract terms.
