Nebraska State Senator Takes Aim at General Purpose Debit Cards

Nebraska State Senator (from Lincoln Nebraska) Bill Avery isn’t too pleased that he can’t use all the value from a non-reloadable prepaid card he received. He has less than a dollar left on the card, and can’t use it. This, in part, prompted him to introduce a bill that would require retailers and merchants to give customers an option of how they would receive a rebate.
Senator Avery introduced LB720 on the opening day of the 2010 Nebraska State Senate session. His bill, titled “ACT relating to consumer protection; to provide requirements for and prohibit certain practices by customer loyalty or incentive programs” would require:

If a retail business establishes a customer loyalty, bonus, or incentive program which provides the incentive in the form of a general-use prepaid card, the business shall also offer the incentive in the form of cash or a negotiable check, at the option of the customer. The check or general-use prepaid card shall not expire for at least one year after the date of issuance. The amount of cash or the value of the check or general-use prepaid card shall not be decreased for administrative, shipping, or handling fees.

The bill defines “general-use prepaid card” quite broadly, to include “a plastic card or other electronic payment device usable with multiple, unaffiliated sellers of goods or services.” (aka, a network-branded prepaid card).

State-specific actions such as this make it difficult to operate gift card and reward debit programs.

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