In a move he called "pro-consumer and pro-business," State Treasurer Robert P. Casey, Jr. today urged the General Assembly to pass legislation that would eliminate expiration dates and prohibit the imposition of fees on gift cards.
"As the popularity of gift cards increases, so, too, does the responsibility to protect the people who receive them and the businesses who sell them," Casey said. "When consumers spend their hard-earned money on a gift card, that gift should not lose value over time or expire. At the same time, businesses should not have to report unredeemed gift cards to the Commonwealth as unclaimed property if they don't ever expire."
Under current law, businesses are required to report unredeemed gift certificates and gift cards to the Treasury Department two years after their expiration date, or five years after their purchase date if they don't expire. Consumers who hold expired gift cards must wait until the end of this so-called dormancy period in order to claim the money that is rightfully theirs. Adding to the difficulty is that the Treasury Department can only pay a claim for an unredeemed gift card after verifying that the business reported it as unclaimed property.
According to Casey, it is very difficult for Treasury to refund money to gift card owners since the issuers of gift cards typically do not collect the names and addresses of card purchasers or recipients. In cases when a business does turn over unredeemed gift card monies to the Commonwealth, Treasury has no way of knowing who is entitled to the money, and, therefore, cannot advertise the names as part of its due diligence efforts to reunite people with their property.
The Commonwealth is currently holding $6.4 million in unclaimed gift card funds, Casey said. In 2005, Treasury collected $650,000 in unclaimed gift certificate/gift card funds from businesses, but returned only about $25,800 to gift card owners.
The National Retail Federation (NRF) has estimated that gift card sales across the country for the 2005 holiday season will total about $18.5 billion, a 6.6 percent increase over last year.
Until the laws are changed, Casey urges consumers to use gift cards as soon as possible. This minimizes the chances of the cards being lost, stolen or expired. Casey also said people should know the policies of each business from whom they purchase gift cards because many gift cards have restrictions or service fees that reduce their value over time.
"It is important for consumers to understand the policies that govern gift cards and the various transaction, service, inactivity and convenience fees that may be imposed on them," Casey said.
Casey suggests that consumers who own expired gift cards first ask the businesses to honor them anyway. If the businesses refuse, consumers should check with Treasury's Unclaimed Property Bureau to see if the money was ever reported to the Commonwealth as unclaimed property. If the businesses did not report the information, then consumers must have the actual gift cards to prove ownership in order for Treasury staff to assist them in getting either the money they are owed or the services they were promised by the card.
Casey also recommends that consumers save gift card receipts in case their cards get lost or stolen. Having receipts may help convince some businesses to reissue the gift cards.
To find out if the Treasury Department is holding unclaimed gift card funds or other unclaimed property in your name, contact the Bureau of Unclaimed Property toll-free at 1-800-222-2046, or search the Unclaimed Property data base on Treasury's Web site at www.patreasury.org