Got any money left from those holiday-season gift cards? State Sen. Ellen Corbett, D-San Leandro, wants to make it easier still for you to cash them in.
Corbett today unveiled SB 885, which would increase the amount on a gift card that consumers can redeem for cash from up to $10 – the amount set by a Corbett-authored law, SB 250, effective Jan. 1, 2008 – to up to $20; a notice stating the card can be redeemed for cash when its value dips below $20 would have to be printed on the card.
Her new bill also would eliminate dormancy fees; under current law, a gift card valued $5 or less that hasn’t been used for two years can be assessed a $1-per-month fee.
“In these difficult times, consumers must have ready access to all of their assets, including unused gift cards,” Corbett said in her news release. “The remainder on their unused gift cards could make a difference in paying their bills and making ends meet. This bill will enhance consumers’ rights and increase compliance with the law.”
Nationwide, nearly $5 billion in gift cards go unspent every year. After a few years, the retailer can claim the consumer’s money as profit without supplying a product or even paying sales tax; companies have claimed up to $43 million in profit from unspent gift cards in a single year.
Consumers Union supports this bill, as it and other consumer advocacy groups did Corbett’s earlier gift-card law, saying it gives gift-card holders their due. But opponents of the earlier law including the California Restaurant Association, CTIA – The Wireless Association, the Direct Marketing Association and the National Association of Theaters Owners California/Nevada had argued giving dollar-for-dollar cash value to gift cards increases the likelihood of fraud – for example, letting stolen or fraudulently-obtained credit cards be turned into cash through the purchase of low-denomination gift cards, or through manipulation of the gift cards’ magnetic stripes. They also said it sticks retailers and restaurants with fees from the credit- or debit-card transaction in which the gift card was bought, and/or with fees small retailer might’ve paid to third-party vendors to handle gift-card preparation, tracking and redemption. Watch for these and similar groups to lobby hard against this bill, too.