Card holders either had to file a claim with the bankruptcy court to redeem their credit or say goodbye to their gift card credit. Yes, prepaid cards can expire. Some restrictions apply. Service may be suspended/terminated if used in violation of Acceptable Use Policy. . Mall/multiple-store gift cards: California law allows merchants to impose service fees and expiration dates for cards that can be used at multiple, unaffiliated businesses. This legal guide answers common questions about gift certificates and gift cards sold after January 1, 2004, with respect to California law. To register online for a prepaid MTS account, visit our Taxpayer Online Services Portal. 911 Surcharge, 988 Surcharge, and Local Charge Rates, Electronic Funds Transfer (EFT) - Frequently Asked Questions (FAQ's), Filing Claims for Refund - Special Taxes and Fees, Local Prepaid Mobile Telephony Services Collection Act (42100-42111), subdivision (e) of Revenue and Taxation code (RTC) section 42020, Pay-As-You-Go cell phone with minutes/airtime, Prepaid telephone calling cards vs. prepaid wireless calling cards, SIM cards sold with prepaid wireless airtime/minutes, Prepaid products and services sold for use outside of California, Kiosks selling prepaid top-up airtime/minutes, Consumers that want to file a claim for refund for local charges, Telecommunication Service Suppliers (Service Suppliers), Medical alert devices and inmate call systems, Multiple Service Suppliers Furnishing Services Using the Same Access Line, Local Prepaid Mobile Telephony Services Collection Act Law, New Local Charge Rate for San Francisco Retail Sales of Prepaid Mobile Telephony Services (MTS) Effective April 1, 2023, New 988 Surcharge and Rates for the 911 and 988 Surcharges Effective January 1, 2023, New Local Charge Rate for San Francisco Retail Sales of Prepaid Mobile Telephony Services (MTS) Effective April 1, 2022, Emergency Telephone Users (911) Surcharge 2022 Rate and Mandatory Online Filing for Service Suppliers, Collection of Local Charges Extended through December 31, 2025, New Local Charge Rate for San Francisco Retail Sales of Prepaid Mobile Telephony Services (MTS) Effective April 1, 2020, Emergency Telephone Users (911) Surcharge Rate Effective January 1, 2020 through December 31, 2020, Collection of 911 Surcharge Required by Sellers Beginning January 1, 2020; Collection of Local Charges by Sellers Extended through December 31, 2020, Emergency Telephone Users (911) Surcharge Rate Effective January 1, 2021 through December 31, 2021, The Emergency Telephone Users Surcharge Return Will Move to Our New Online Services System Effective November 9, 2020, Important Notice Regarding Your Emergency Telephone Users Surcharge Return, Changes to the Emergency Telephone Users (911) Surcharge Effective January 1, 2020, Information for Local Jurisdictions and Districts, Total due on sale (Price of Phone + Airtime + 911 Surcharge + 988 Surcharge + Local Charges + Sales Tax), Prepaid phone (see computation below for amount of sales tax included), 1000 minutes of airtime (911 Surcharge and local charges included), Local charges included in selling price (see computation below), Total due on sale* (price of phone + price of airtime), Total due on sale (single price of phone and airtime + 911 Surcharge + 988 Surcharge + local charges + sales tax), Prepaid phone + 10 minutes of airtime (or $5 in airtime), Total due on sale (price of phone + airtime + sales tax), Prepaid smartphone and 60 minutes of airtime, Total due on sale (prepaid smartphone and 60 minutes of airtime + 911 Surcharge + 988 Surcharge + local charges + sales tax), SIM card + one month unlimited talk & text, Total due on sale (SIM card + one month unlimited talk & text + 911 Surcharge + 988 Surcharge + local charges), Selling price of prepaid wireless airtime card. Lessons for selling with an expiration date The CARD Act provides a compelling case study into the need for every small business owner to hire a good business law attorney. You are a seller located outside of California who makes online retail sales of prepaid MTS. 1488 (February 11, 1997) Gift Certificates; see also California Civil Code Section 1749.5(b)(1), regarding gift certificates sold after January 1, 1997. Calls are billed in one-minute increments. Can the holder of a gift card that is subject to a service fee use it to purchase a gift card that is not subject to a service fee? Dispute the location of the retail transaction, Believe the transaction is exempt from the local charges, or. Order reward cards On Demand and in bulk for your business. Refills of $10 to $24 expire in 30 days. Sales of prepaid data service plans (minutes) that can be used for data, text, or as cell phone airtime minutes are subject to the 911 surcharge, 988 surcharge, and local charges apply (if applicable). The Attorney General's Opinion concluded that a gift certificate for a meal sold by a restaurant may not contain an expiration date. Buyers should be aware when purchasing "unaffiliated, multiple seller" cards that not all questions about the terms of these cards have been answered by the Legislature or the courts. The following examples show how to compute local charges and/or sales tax on SIM cards sold with prepaid airtime. Specified tangible and intangible personal property that is held or owing in the ordinary course of business and remains unclaimed by the owner for more than three years escheats (reverts) to the state. Are a "gift certificate" and a "gift card" the same thing? The app can only activate a T-Mobile prepaid line. Is the money on my prepaid card FDIC-insured. The number of access lines subject to the 911 and 988 surcharges in a PBX phone system shall not exceed the total number of concurrent outbound calls that can be placed to the 911 emergency communications system or 988 suicide and crisis lifeline at the same time. The invoice, receipt, or other similar document must show the amount of the 911 Surcharge ($0.30), the amount of the 988 surcharge ($0.08), and the amount of sales tax ($5.40) at the time of the retail sale of prepaid MTS. Firstly, there are some federal laws which apply across the board. The amount of prepaid wireless minutes/airtime is a minimal amount, that is, $5 or less, or 10 minutes or less, or. The most common types of prepaid expenses are prepaid rent and prepaid insurance. In Illinois, the combined effect is basically that gift cards and certificates should never expire. If you are a service supplier and have questions regarding this program or need to register with the CDTFA, please contact Special Taxes and Fees at the following address or telephone number: Special Taxes and Fees, MIC: 88 California Department of Tax and Fee Administration PO Box 942879 Sacramento, CA 94279-0088. However, the holder of the certificate or card may have a claim against the bankruptcy estate. Contrasea. Please make sure to check out our resources for sellers (above) if you are a service supplier that also makes retail sales of prepaid MTS to prepaid MTS consumers. Sales tax applies to the $99.99 selling price of the cell phone. A Local Charge Agreement for state collection and administration of local charges, A Certification of ordinance that applies to local charges, A Resolution to authorize representative(s) for the local jurisdiction. By comparison, CorePower Yoga sold prepaid yoga classes in packs of five, ten, and 20 that expired within six months. Our goal is to provide a good web experience for all visitors. See Assembly Floor analysis dated August 11, 2004. Compare two recent cases of fitness companies who sold class packs to customers and faced lawsuits over alleged violations of the CARD Act: SoulCycle, a nationwide operation of indoor spin cycling studios, and CorePower Yoga, a yoga studio chain. Consider purchasing a gift certificate or gift card from a retailer for use with it and its affiliates. The sale is not subject to the 911 surcharge, 988 surcharge, or local charges. April 22, 2015 / 6:41 PM Be sure to check your cardholder agreement to see if you can get back the money that may still be on the card when it expires. No. Emergency Telephone Users Surcharge Regulations, Publication 39A, Emergency Telephone Users (911) Surcharge and Prepaid 911 Surcharge. devices). 2023 CBS Broadcasting Inc. All Rights Reserved. The Gift Card Granny Visa Gift Card and the Virtual Visa Gift Card are issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Prepared by: John C. Lamb, Senior Staff Counsel, Legal Services Unit, January 2004; Revised by Norine Marks, Senior Staff Counsel, July 2008; revised by Claire Yazigi, Staff Counsel, December 2010. An issuer may accept funds toward the purchase of a gift certificate from one or more contributors as a gift for another person (the "recipient"), and may require a date by which the recipient must redeem the funds. will expire . Both state and federal law now regulates gift cards and certificates. This argument has not been tested, and it is doubtful that it would be successful. California Gift Card Law | GiftCardGranny, Subscribe to newsletter for special discounts, California Department of Consumer Affairs web site. If the gift card was sold at a discount, the card may state an expiration date, but it must be at least 30 days after it was sold. Can prepaid cards expire? Independently owned kiosks operating inside a retail store are considered the seller of the prepaid MTS sold at the kiosk. Think of Netflix, Dollar Shave Club, Blue Apron, and what feels like hundreds of monthly "boxes" delivering everything from clothing, to vinyl records, to wine. The amount of airtime in the bundled transaction is considered minimal because it is 10 minutes or less. The United States, its unincorporated agencies and instrumentalities, or any state of the United States; Any incorporated agency or instrumentality of the United States wholly owned by either the United States, or a corporation wholly owned by the United States; The American Red Cross, its chapters and branches; Banks, including national banking associations, located within the limits of California; Enrolled Indians who are service users subscribing for service from within the limits of an Indian reservation; Federal credit unions organized in accordance with the provisions of the Federal Credit Union Act; Insurance companies, including title insurance companies, that pay the California gross premium insurance tax. If balance is insufficient to renew all lines on your account for 120 days, all lines will . As with food gift cards, however, the expiration date must be printed on the front of the card in 10-point type. Should You Give Someone a Gift for Saint Patricks Day? Climbaroo also told us it keeps track of the visits in their computer system in case someone loses their card. Gift certificates and gift cards are covered by statutes setting these basic rules:2, FREQUENTLY ASKED QUESTIONS ABOUT GIFT CERTIFICATES AND GIFT CARDS, Q.1. The provider might charge you a fee for this. Spengler Agans Bradley offers a flat-rate legal checkup for startups and business needing a broad, overall legal review of their business and business practices. Get the best pay as you go phone plan or prepaid phone plans with the latest phones. For example, on money orders more than a year old, WesternUnion charges a $2-per-month service fee for each month after the first 12 up to a maximum of $144. (877) 328-9677, or contact your county social services agency. Moreover, they would have no effect if a seller of a card usable with unaffiliated, multiple sellers successfully take the position that these prohibitions do not apply to the card because it does not contain an expiration date, and therefore is exempt from the definition of gift certificate under section 1749.45(a). The amount of airtime in the bundled transaction is not considered minimal because it is more than 10 minutes. A gift certificate or gift card without an expiration date is valid until it is redeemed or replaced.20, Notwithstanding any policy of the seller, effective January 1, 2008, a gift certificate with a cash value of less than ten dollars ($10) is redeemable in cash (not a new certificate or merchandise) for its cash value.21 Cash for purposes of this section includes currency or check.22 Where a seller accepts funds toward a gift certificate from one or more contributors as a gift for another person (the "recipient"), the seller must give each contributor a full refund of the amount paid toward the certificate if the time in which the recipient may redeem the funds by purchasing a gift certificate is clearly disclosed in writing to contributors and recipient and the recipient does not redeem the funds by the time disclosed.23. The amounts for the 911 surcharge, the 988 surcharge, and local charges should be separately stated on the invoice, receipt, or other similar document that is provided to the prepaid consumer, or otherwise disclosed electronically to the prepaid consumer, at the time of the retail transaction. In addition, ask about the locations where the unspent portion of the value can be redeemed, and the manner in which that amount can be redeemed. . (sel. Passports. In the new on demand economy, subscription-based revenue models, or subscription plans, have grown in popularity. If the sale is also subject to sales or use tax, the sales/use tax does not apply to the 911 surcharge, 988 surcharge, or local charge amounts. The price of the cell phone component of the bundled charge is not disclosed to the prepaid MTS consumer. Since California's Legislative Counsel has concluded that the issuer (not the holder) may choose between these two methods,24 the likely answer is that the issuer may set its own policy. However, prepaid telephone calling cards that allow the purchaser to use minutes from either a landline or a cell phone by calling an 800 number, or by PIN-less calling are not subject to the 911 surcharge and 988 surcharge of local charges. In the case of a gift card usable with multiple, unaffiliated sellers, ask about expiration dates and any applicable fees. Gen. 243 (2000). The Tello Economy plan is the Best Cell Phone Plan of 2023. Refill of $100 or more expires in 365 days. A customer who lives in San Francisco purchases prepaid wireless airtime from you at your store location in San Jose. When a store clearly displays a limited or no-refund policy, however, refunds and exchanges are not required by law. First, sales of prepaid MTS from your California business location are subject to the 911 surcharge, 988 surcharge, and local charges (if applicable). This avoids the problem of spending additional money on a purchase when it's difficult to find merchandise priced lower than $10. A recently adopted California law is intended to help gift certificate and gift card holders when the seller declares bankruptcy. What happens if the seller of the gift certificate or gift card files bankruptcy? The plaintiff in the case successfully argued that the certificates were issued in a specified amountthat is, the series certificates (the Plaintiffs term of art for the prepaid spin cards) could be used to purchase classes up to the amount specified on the certificate. In California, for example, it's against the law for store gift certificates and gift cards to have an expiration date or dormancy fees (except under certain circumstances), and if the balance on the card is less than $10, you can redeem it for cash. Buying guide for best prepaid cell phones. The customer's billing information shows they live in Sacramento, CA. 21California Civil Code section 1749.5(b)(2). A. A Private Branch Exchange (PBX) phone system is commonly used in many business environments where multiple access lines are needed. Since most of the answers also have exceptions, be sure to read the entire answer. A seller of these unaffiliated, multiple seller cards may take the position that such cards without an expiration date are exempt from the definition of "gift certificate" under Civil Code section 1749.45(a), and therefore service fees or dormancy fees can be imposed and do not have to be disclosed.