Lawmakers seek to protect consumers from losing money on unused gift cards
Dec 5, 2023, 7:02 AM
As the holiday season approaches, the issue of unspent gift cards has sparked concern among lawmakers in the state of Washington. Senators and representatives are pushing for legislative changes to address the millions of dollars lost by consumers due to unused gift cards, branding the current situation as unfair corporate profit.
In a press conference held Monday, Sen. Yasmin Trudeau and Rep. Emily Alvarado highlighted the pressing need for reforms in state laws governing gift cards and mobile app funds.
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According to Trudeau, “We don’t buy gift cards expecting a large corporation is going to find ways to keep as much money as they can — that’s what we are here to address.”
The crux of the problem lies in a legal loophole dating back to 2004. While gift cards in Washington do not expire, if left unused for three years, the funds on these cards or mobile apps from Washington-based retailers are absorbed as profit by the retailer, leaving consumers at a loss.
Alvarado emphasized, “It’s gift-giving season, and many of us provide gift cards to our loved ones. Our state laws haven’t grown and changed to help consumers. These are common-sense protections for people and accountability for corporations.”
Proposed legislation aims to close this loophole, redirecting unclaimed funds to the state Department of Revenue’s unclaimed property division. This move would enable individuals to reclaim their unused funds, ensuring better protection for consumers.
Key aspects of the proposed reforms include allowing consumers to cash out small amounts on gift cards or mobile apps, informing customers of unspent funds, and enabling the reloading of gift cards and mobile apps with desired amounts instead of imposing high minimums. Notably, small businesses generating annual revenue under $25 million would be exempt from these reforms.
Margaret Gritten, policy director for the Washington branch of the YWCA, highlighted the discrepancy, stating, “More than 70% of Fortune 500 companies return unspent funds to consumers or public services. However, here in Washington, large corporations are able to keep unspent gift cards.”
Moreover, under RCW 63.29.140(1) of the Uniform Unclaimed Property Act (UUPA), gift cards are presumed abandoned if unredeemed after three years, adding urgency to the need for legislative action.
While 13 states have already implemented legislation requiring retailers to notify gift card purchasers of any unused funds, Washington State is striving to join this proactive group, prioritizing consumer rights and transparency in the realm of gift card usage.
Trudeau and Alvarado are committed to finalizing and introducing this legislation in both chambers before the session commences in January, aiming to provide relief and fair treatment to consumers facing this prevalent issue.
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