Lawmakers Tackle Gift-Card
Problems
Gift cards are becoming increasingly
popular with consumers. Last holiday season, consumers were
estimated to have spent more than $18 billion on these cards—more
than was spent on clothing purchases. Accounting firm Deloitte
Touche found that adults received an average of 3.2 gift cards
during the holiday season, with a face value of $142.98.
The Wisconsin Bureau of Consumer
Protection reports that consumer gift-card complaints are also
increasing. Consumers are unhappy about high disclosed and undisclosed
fees, the lack of locations where the cards are accepted, and
undisclosed expiration dates.
Representative Peggy Krusick (D–Milwaukee)
and Senator Sheila Harsdorf (R–River Falls) have introduced
Assembly Bill 583 to regulate gift cards. The bill prohibits
gift-card expiration dates, allows consumers to request a cash
refund, requires merchants to refund any balance less than $5,
and requires merchants to disclose the date the card was issued
and the remaining balance. The bill also creates substantial
civil penalties and allows consumers to bring their own court
complaints.
The bill is opposed by several
organizations, including the Wisconsin Grocers Association,
the Merchants Federation, the Wisconsin Restaurant Association,
American Express, and Kwik Trip, Inc. According to the Wisconsin
Grocers Association, the bill goes too far because there are
costs associated with keeping track of gift cards and because
the $10,000 maximum potential civil penalty is too high. Together,
the groups are seeking alternative legislation that is less
strict.
Krusick and Harsdorf said they
introduced the bill because of constituent complaints. Rep.
Krusick states, “It’s very simple; a gift card that
says $50 on the front should be worth $50.” Their bill
is supported by a bi-partisan majority of legislators in both
the Assembly and Senate, as well as by the Department of Agriculture,
Trade & Consumer Protection. To date, seven states have
enacted gift-card regulations and 15 state legislatures are
considering similar bills.
How should you protect yourself?
The U.S. Comptroller of the Currency advises you to understand
what fees are being charged before you purchase the gift card,
including (1) purchase fees; (2) monthly, service, administrative,
or maintenance fees; (3) inactivity fees; (4) transaction fees;
and (5) miscellaneous fees for balance inquiries, replacing
a lost or stolen card, or for other services. Also, make sure
you know your card’s expiration date and where it can
be used. Finally, if you buy the card for someone else, make
sure you pass along this important information to him or her.
Do you support this bill or does
it go too far? You can let your state legislator know how you
feel by contacting the Legislative Hotline toll free at 1-800-362-9472.
