SB2014 104TH GENERAL ASSEMBLY

LRB104 09587 SPS 19650 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB2014

Introduced 2/6/2025, by Sen. Steve Stadelman

SYNOPSIS AS INTRODUCED:

New Act

Creates the Gift Card Scam Prevention Act. Provides that a merchant shall not knowingly sell an open-loop gift card to a consumer unless the merchant satisfies specified requirements. Provides that a third-party gift card reseller that buys or sells an open-loop gift card as part of a transaction occurring in the State shall record and maintain a copy of specified information. Provides for enforcement of the Act by the Attorney General. Effective January 1, 2026.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Gift Card Scam Prevention Act.

Section 5. Definitions. As used in this Act:

"Merchant" means an owner or operator of any retail mercantile establishment and includes, but is not limited to, any corporation, including parent, subsidiaries and sister companies, partnerships, sole proprietorship, or any other form of business entity.

"Open-loop gift card" means a card, code, or device: (i) that is issued to a consumer on a prepaid basis primarily for personal, family, or household purposes in a specified amount, regardless of whether that amount may be increased or reloaded in exchange for payment; (ii) is network branded; (iii) is redeemable on presentation at multiple unaffiliated merchants for goods or services within the payment card network; or (iv) is usable at an automated teller machine.

"Third-party gift card reseller" means a merchant who, without authorization from or affiliation with the business entity issuing an open-loop gift card, is engaged in the business of buying open-loop gift cards on behalf of consumers or reselling open-loop gift cards to consumers.

Section 10. Sale of open-loop gift cards. A merchant shall not knowingly sell an open-loop gift card to a consumer in this State, unless the merchant:

(1) For in-person sales:

(A) clearly displays a notice in substantially the same form as the model notice created under this Section, at or near the physical location where the open-loop gift card is displayed for sale; and

(B) ensures that the open-loop gift card is enclosed in secure packaging that:

(i) is sealed in a manner that is not easily opened without signs of tampering;

(ii) conceals all numeric codes specific to the activation or the redemption of the open-loop gift card, including any bar code, card verification value, personal identification number, or activation code; and

(iii) includes a warning that states the following or uses language substantially similar to the following: "Do not sell or purchase if packaging has been broken or indicates tampering.".

(2) For online sales, clearly displays a notice on the webpage where the open-loop gift card is offered for sale that is displayed before the sale is finalized.

Section 15. Exceptions. A merchant may sell an open-loop gift card that is not enclosed in secure packaging as required under item (iii) of paragraph (1) of Section 10 if the open-loop gift card:

(1) is a chip-enabled, numberless card that is activated by a consumer after registering the card on the card issuer's website; or

(2) is sold exclusively by:

(A) a merchant for use only at the retail establishment of the merchant; or

(B) a group of affiliated merchants for use only at the retail establishments of the affiliated merchants; and

(3) is secured in a physical location within the merchant's retail establishment that is accessible only by an employee of the merchant.

Section 20. Third-party gift card resellers.

(a) A third-party gift card reseller that buys or sells an open-loop gift card as part of a transaction occurring in this State shall record and maintain a copy of the following information for no less than 3 years:

(1) the date of the transaction;

(2) the name of the person who conducted the transaction;

(3) the name, age, and address of the seller of the open-loop gift card;

(4) the driver's license number or identification card number of the seller and purchaser;

(5) a description of the purchased open-loop gift card, including the card number and retailer for which the open-loop gift card is intended for use;

(6) the specific amount issued on the open-loop gift card;

(7) the prices paid to conduct the transaction; and

(8) the signature of the purchaser.

(b) A third-party gift card reseller shall allow any duly authorized law enforcement officer to inspect a record of the information required under subsection (a) and any open-loop gift cards in the third-party gift card reseller's possession during the ordinary business hours of the reseller or at any other reasonable time.

Section 25. Consumer protection. The Attorney General shall compile facts on open-loop gift card scams and provide information to the public concerning what an individual should do if they think they are a victim fraud, including, but not limited to:

(1) creating a publicly accessible webpage that provides facts about open-loop gift cards and information on what to do if an individual suspects they may be a victim of fraud; and

(2) issuing guidelines concerning the detection and prevention of open-loop gift card fraud that raises public awareness about open-loop gift card fraud and making the guidelines available on the webpage desired in paragraph (1).

Section 30. Enforcement and penalties. The Attorney General shall enforce the provisions of this Act. Any merchant or third-party gift reseller that violates this Act is subject to a civil penalty of no more than $5,000 for each violation. All moneys collected under this Section shall be deposited into the Debt Settlement Consumer Protection Fund.

Section 35. Rulemaking. The Attorney General shall adopt rules necessary to administer and enforce this Act.

Section 99. Effective date. This Act takes effect January 1, 2026.