LRB-0958/4
CTS:lmk:rs
2007 - 2008 LEGISLATURE
July 26, 2007 - Introduced by Representatives Krusick, Jeskewitz, Hraychuck,
Grigsby, Hahn, Hubler, Molepske, A. Ott, A. Williams
and Zepnick,
cosponsored by Senators Carpenter and Coggs, by request of
AARP-Wisconsin, Coalition of Wisconsin Aging Groups, Wisconsin Public
Interest Research Group (WISPIRG). Referred to Committee on Small
Business.
AB471,1,3 1An Act to amend 165.25 (4) (ar); and to create 100.55 of the statutes; relating
2to:
terms and conditions of gift certificates, gift cards, and other gift obligations
3and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill regulates the sale and redemption of gift certificates, gift cards, and
similar items (gift obligations). The bill prohibits the following: 1) failing to honor
a valid gift obligation; 2) selling a gift obligation that is subject to an expiration date;
3) reducing the value of a gift obligation except for the sale price of goods or services
provided to the bearer; and 4) reducing the value of a gift obligation as a condition
of disclosing the value of the gift obligation. Under the bill, the prohibitions
numbered 2 and 3, above, do not apply to a gift obligation given or sold for less than
face value to a nonprofit organization or to a person who transfers the gift obligation
to another primarily for the benefit of a nonprofit organization or to a gift obligation
issued for no consideration. Also under the bill, if a person that owns a business
intends to transfer ownership of the business or otherwise cease to operate the
business, the person may not issue gift obligations that may be redeemed at the
business, unless the intended transferee agrees to honor gift obligations issued by
the person. The provisions of the bill do not apply to certain state chartered financial
institutions to the extent that federal law preempts or prohibits the application of
the provisions of the bill to certain federally chartered financial institutions.
The Department of Agriculture, Trade and Consumer Protection or the district
attorney, under the bill, may enforce the provisions of the bill by bringing an action

for a forfeiture (civil penalty) of up to $10,000. Also, the bill creates a private right
of action in which a person may recover the greater of twice the person's pecuniary
loss or $200 for each violation.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB471, s. 1 1Section 1. 100.55 of the statutes is created to read:
AB471,2,5 2100.55 Gift obligations. (1) Definition. In this section, "gift obligation"
3means an obligation, evidenced by a gift certificate, gift card, or other object or
4document, to accept the gift certificate, gift card, or other object or document from the
5holder as payment, up to a specified amount, for a merchant's goods or services.
AB471,2,7 6(2) Prohibitions; terms of gift obligations. (a) No person may refuse to honor
7a valid gift obligation.
AB471,2,118 (b) Subject to sub. (4), no person may reduce the value of a gift obligation, except
9that when a holder of a gift obligation partially redeems the gift obligation as
10payment for goods or services, the merchant that provides the goods or services may
11subtract the sale price of the goods or services.
AB471,2,1412 (c) Subject to sub. (4), no person may sell a gift obligation that is subject to an
13expiration date. An expiration date that purports to apply to a gift obligation is void
14and unenforceable.
AB471,2,1615 (d) No person who sells a gift obligation may reduce the value of a gift obligation
16as a condition of disclosing the value of the gift obligation.
AB471,3,317 (e) No person that owns a business may issue a gift obligation that may be
18redeemed at that business if the person intends to cease operation of the business or
19if the person intends to transfer ownership of the business, unless the intended
20transferee has agreed to honor gift obligations issued by the person under the terms

1and conditions applicable to the person. For purposes of this paragraph, a person
2intends to cease operation of the business or transfer ownership of the business if any
3of the following applies:
AB471,3,44 1. The person enters into an agreement to sell the business.
AB471,3,85 2. The person enters into an agreement to sell realty, fixtures, or personalty
6associated with the business without which the business is unable to continue
7operating, and the person does not actively seek to replace the realty, fixture, or
8personalty.
AB471,3,109 3. The person files for bankruptcy in a manner that requires the person to
10relinquish ownership of the business.
AB471,3,1311 4. The person takes an action similar to the actions described in subd. 1. to 3.
12that commits the person to relinquishing ownership of the business to another
13person.
AB471,3,18 14(3) Penalties and remedies. (a) Any person who suffers pecuniary loss because
15of a violation of this section may commence an action for the pecuniary loss. If the
16person prevails, the person shall recover twice the amount of the pecuniary loss, or
17$200 for each violation, whichever is greater, together with costs, including
18reasonable attorney fees, notwithstanding s. 814.04 (1).
AB471,3,2219 (b) The department may commence an action in the name of the state to
20restrain by temporary or permanent injunction a violation of this section. Before
21entry of final judgment, the court may make any necessary orders to restore to any
22person any pecuniary loss suffered by the person because of the violation.
AB471,3,2523 (c) The department or any district attorney may commence an action in the
24name of the state to recover a forfeiture to the state of not less than $100 nor more
25than $10,000 for a violation of this section.
AB471,4,2
1(4) Exceptions. (a) Subsection (2) (b) and (c) does not apply to any of the
2following:
AB471,4,83 1. A gift obligation given or sold to a person for an amount that is less than the
4value of the gift obligation, if the person is an organization that is exempt from
5federal income tax under section 501 (a) of the Internal Revenue Code or if the person
6transfers the gift obligation to another primarily for the benefit of an organization
7that is exempt from federal income tax under section 501 (a) of the Internal Revenue
8Code.
AB471,4,99 2. A gift obligation issued for no consideration.
AB471,4,1510 (b) This section does not apply to a state chartered bank, trust company,
11savings and loan association, savings bank, or credit union, or to a subsidiary of a
12state chartered bank, trust company, savings and loan association, savings bank, or
13credit union, to the extent that federal law preempts or prohibits the application of
14this section to a federally chartered bank, trust company, savings and loan
15association, savings bank, or credit union of the same type.
AB471, s. 2 16Section 2. 165.25 (4) (ar) of the statutes, as affected by 2005 Wisconsin Act 458,
17is amended to read:
AB471,4,2318 165.25 (4) (ar) The department of justice shall furnish all legal services
19required by the department of agriculture, trade and consumer protection relating
20to the enforcement of ss. 100.171, 100.173, 100.174, 100.175, 100.177, 100.18,
21100.182, 100.195, 100.20, 100.205, 100.207, 100.209, 100.21, 100.28, 100.37, 100.42,
22100.50, 100.51, and 100.195 100.55 and chs. 126, 136, 344, 704, 707, and 779,
23together with any other services as are necessarily connected to the legal services.
AB471, s. 3 24Section 3. Initial applicability.
AB471,5,3
1(1) This act first applies to gift obligations, as defined in section 100.55 (1) of
2the statutes, as created by this act, that are sold on the effective date of this
3subsection.
AB471, s. 4 4Section 4. Effective date.
AB471,5,65 (1) This act takes effect on first day of the 6th month beginning after
6publication.
AB471,5,77 (End)
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