Texas Business & Commerce Code - Section 35.42. Reduction Of Value Or Expiration Of Stored Value Card
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§ 35.42. REDUCTION OF VALUE OR EXPIRATION OF STORED VALUE
CARD. (a) In this section:
(1) "Record" has the meaning assigned by Section
43.002, and includes a record that contains a microprocessor chip,
magnetic strip, or other means of storing information.
(2) "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.
(3) "Use" of a stored value card includes a whole or
partial redemption of or adding value to the card.
(b) This section does not apply to a stored value card that:
(1) is distributed by the issuer to a person under an
awards, rewards, loyalty, incentive, rebate or promotional program
and not issued or reloaded in exchange for money tendered by the
cardholder;
(2) is sold below face value or donated to:
(A) an employee of the seller or issuer;
(B) a nonprofit or charitable organization; or
(C) an educational institution, for fund-raising
purposes;
(3) is issued by a financial institution acting as a
financial agent of the United States or this state;
(4) is issued as a prepaid calling card by a prepaid
calling card company regulated under Section 55.253, Utilities
Code;
(5) does not expire and for which the seller does not
charge a fee other than a fee described in Subsection (d); or
(6) is issued by an air carrier holding a certificate
of public convenience and necessity under Title 49, United States
Code.
(c) This section does not apply to a stored value card
issued by a federally insured financial institution, as defined by
Section 201.101, Finance Code, for which the financial institution
is primarily liable as the issuing principal.
(d) If disclosed as provided by Subsection (f), the issuer
of a stored value card may impose and collect a reasonable handling
fee in connection with the issuance of or adding of value to the
card, a reasonable access fee for a card transaction conducted at an
unmanned teller machine, as defined by Section 59.301, Finance
Code, and a reasonable reissue or replacement charge if a lost or
expired card is reissued or replaced.
(e) The issuer of a stored value card may impose or collect a
periodic fee or other charge that causes the unredeemed balance of
the card to decrease over time only if the fee is reasonable, is not
assessed until after the first anniversary of the date the card is
sold or issued, and is disclosed as provided by Subsection (f).
(f) An expiration date or policy, fee, or other material
restriction or contract term applicable to a stored value card must
be clearly and conspicuously disclosed to a person at the time the
card is sold or issued to the person to enable the person to make an
informed decision before the person purchases the card. A
disclosure regarding expiration or a periodic fee that reduces the
unredeemed value of the stored value card must also be legibly
printed on the card. A stored value card that is sold without the
disclosure as required by this section of an expiration date or
policy, fee, or other material restriction or contract term
applicable to the card is valid until redeemed or replaced.
(g) This section does not create a cause of action against a
person who issues or sells a stored value card.
Added by Acts 2005, 79th Leg., ch. 81, § 1, eff. Sept. 1, 2005.
Section: 35.31 35.32 35.33 35.39 35.395 35.40 35.41 35.42 35.44 35.45 35.455 35.46 35.47 35.48 35.49
Last modified: August 10, 2007
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