STAND. COM. REP. NO. 2391

Honolulu, Hawaii

RE: S.B. No. 2797

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2797 entitled:

"A BILL FOR AN ACT RELATING TO CONSUMER PROTECTION,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish a gift card fraud law, under the scope of the unfair and deceptive practices law, which requires merchants and third-party gift card resellers to take certain steps to prevent gift card scams;

(2) Require the Office of Consumer Protection to create model notices and issue certain guidelines;

(3) Require the conspicuous provision of information regarding terms and conditions of gift certificates, regardless of whether the cards are sold in person, electronically, or telephonically; and

(4) Extend the minimum redemption period for paper gift certificates from two to four years.

Your Committee received testimony in support of this measure from AARP Hawaiʻi and the Hawaiʻi Restaurant Association.

Your Committee received testimony in opposition to this measure from Retail Merchants of Hawaii.

Your Committee received comments on this measure from the Office of Consumer Protection of the Department of Commerce and Consumer Affairs.

Your Committee finds that gift card fraud has been increasing in the State and can result in significant financial losses for residents. This measure would make information about gift card fraud more widely available and require merchants to take certain steps to safeguard the integrity of gift cards sold in stores and online to help protect consumers from fraudulent behavior.

Your Committee acknowledges the concerns raised in testimony by the Department of Commerce and Consumer Affairs' Office of Consumer Protection that criminal law enforcement must be empowered to comprehensively address gift card fraud. Accordingly, your Committee has amended this measure by:

(1) Inserting language that clarifies that fraudulent use of a gift card is a criminal offense and establishes certain penalties;

(2) Inserting language that clarifies that disclosures in relation to fees shall be those authorized by law;

(3) Inserting language that clarifies that any waiver or attempted waiver of the protections under this section is void;

(4) Amending section 1 to reflect its amended purpose;

(5) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(6) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2797, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2797, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

________________________________

JARRETT KEOHOKALOLE, Chair