Should expired gift card money should flow to treasury ?

[The Straight Story]

ABANDONED PROPERTY: Legislator seeks windfall for state

He says expired gift card money should flow to treasury

CARSON CITY -- Incoming freshman Assemblyman Ruben Kihuen went out to dinner with a friend recently, planning to use a $100 gift card he had received last year as a Christmas gift to pay for the meal.

To Kihuen's dismay, the gift card had expired, meaning the high-end restaurant that issued the card had received a $100 windfall at the expense of the gift card giver.


Kihuen, a Las Vegas Democrat, said he would like to change this practice and instead have expired gift card money flow to the state treasury by defining it as abandoned property.

If a merchant has no address for the owner of the card, which is typical, the money would go to the state.

"If people lose their money, there should be some way to give it back to them," he said. "We could use that money for educational programs, after-school programs, for all kinds of things."

Kihuen has submitted a request for a bill to accomplish this in the 2007 session of the Legislature.

Kihuen said researching his proposal revealed that the gift card industry is now a $60 billion a year business and that as much as 15 percent of all gift cards go unused across the nation for one reason or another.

http://www.reviewjournal.com/lvrj_home/2006/Dec-25-Mon-2006/news/11552123.html

[Redneck Socialist]

1. Some states don't allow them to expire, IIRC n/t

[kath]

3. this should be the case in ALL states. Having gift cards "expire" is total

b.s., IMO.

[knitter4democracy]

11. Michigan's one of them.

Gift certificates and cards cannot expire. It's the law. Gov. Granholm fought for that as our AG and still does as our governor.

[ret5hd]

2. Excellent idea!

[Der Blaue Engel]

4. How about a law that says "no expiration date on gift cards"?

They should be considered currency. This windfall concept is ridiculous. Someone already paid that restaurant $100. They're not losing anything by honoring it. I think this is the most deceitful, nasty business practice, and it should be illegal.

[Infinite Hope]

5. How about just banning expiration dates on gift cards. They bought it, they can use it whenevever...

they want.

It makes no sense to have an expiration date.

[WannaJumpMyScooter]

6. This is bullshit, they should never exipre

if I want to let the things sit on the shelf for years, that is my business... they companies have had the money all that time, and I am sure they have made interest on it.

[Ediacara]

7. Actually... gift cards should never expire

How is that any different from straight up stealing?

[melm00se]

8. how about gift certificates?

most of them have expiration dates.


I can understand the need for them to expire, dealing with the accounting piece has to be a nightmare, realize the revenue this year vs next year's or the year after's inventory..

[SoCalDem]

14. It's not a "nightmare". It's a piece of paper, when used for merchandise/service

is oh-so-easy to account for. This expiration stuff is total BS..

they are numbered to keep track of them before and as they are sold, but all the customer did was to trade CASH for a different piece of paper/card/whatever.
I know parents who buy gift cards for their kid's "emergencies".. or unexpected gifts they may have forgotten to buy..

The stores do not lose on these. there should be NO bookkeeping issues at all..It's just like money..

[melm00se]

17. unfortunately

from an accounting point of view gift cards/gift certificates are not the same as an immediate cash/product exchange transaction.

these are treated as promissory notes and are carried on the balance sheet as liabilities (the business owes a future something in exchange).

carrying these items for more than 1 year the accounting issue raises its head and that has an associated cost involved.

Plus, if you carry quite a few of these transactions, the libaility line grows and can really put a drag on your balance sheet.

for a larger company, this is no big thing, there are usually a sufficient number of other transactions that act as offsets, but for a small business, these can really cause some issues.

So you have the cost of the accounting issue, then as proposed above the regulation requiring abandoned property going ot the treasury, the costs of compliance start to go up.

You might be thinking "well banks and other investment houses can handle this" and you are absolutely correct...but their entire business is built around "cash for cash" transactions and they have the infrastructure necessary to, efficiently and economically, deal with these issues.

[SoCalDem]

21. Sounds like some companies should stop offering "gift cards" then

They seem to have no problem accepting the cash (for no merchandise/service) when the first half of the transaction is made. If they do not want the second half "hassle", they need to stop "selling" the cards/certificates OR advertise HEAVILY that the cards are time-limited.I suspect they don't want to do that, because competitors would then advertise NO-time-limited cards for sale.

What they are doing is stealing from people..they got the $100 or $50 or whatever..with little effort, and so merchandise/service traded for it, and tnen get pisst if the recipients don't use it fast enough..

.]

[Squatch]

9. Does cash "expire"?

[razors edge]

16. Ever here of inflation?

:P :P

[Sherman A1]

10. I think that Mr Klhuen

should take issue with the management of the restaurant. It is entirely bogus that these cards expire, it is also in the best interest of the business to bend the rules and not lose a customer (or customers) over what is essentially a due bill. They have received the payment and I believe it would be very easy to make a court case out of this... it is really nothing more than theft on the part of the business.

[razorman]

12. A law banning expiration dates would be much better than

simply letting the government steal the money.

[AZBlue]

13. What a moron. Yeah, let's give something completely inane like this to the govt to take care of

instead of, oh, I don't know...poverty, homelessness, senior care and Iraq.

[Cleita]

15. This upsets me. If the gift card is paid for there should be no

expiration date. If it's a gift card the restaurant or store issues for promotional purposes and puts an expiration date on it, then that's fine because no money changed hands. In any case there is no money to be handed over to the state.

[kskiska]

18. I just received a Linens n Things gift card that states

"Gift card value never expires."

[AngryAmish]

19. Banks do this

If nobody claims a deposit then the money "escheats" (II RC) to the state. Same with real estate if someone dies and an heir cannot be found.

[trumad]

20. As a consumer...we should read the fine print.

Don't get me wrong..I'm totally against them expiring...but before we buy gift cards we should make sure they don't expire. Me-thinks that if folks find this out before they buy, they won't buy them---then the sellers will catch a clue and change the policy.

[high density]

22. They're already supposed to turn the money over to the state in Maine

But I think many/all of them get around that by charging retroactive 'fees' that quickly wipe out the balance after 24 months.