September 18, 2007 > Gift Card bill heads to governor
Gift Card bill heads to governor
Submitted By Darby Kernan
Working to put more money back into the pocket books of consumers, Senator Ellen Corbett (D-San Leandro) passed legislation that will allow consumers to redeem gift cards for cash.
SB 250 specifically requires retailers to provide cash to consumers for their unused and partially used gift cards that are under ten dollars.
"This is a straight forward bill that makes sense for consumers," said Senator Corbett. "Last year, $8.2 billion went unspent in gift cards; that money should go directly to consumers."
"Under current law, a store can refuse to refund the remaining value of a gift card in cash, no matter how small the value," added Sen. Corbett. "It is wrong that retailers are making a profit without providing a service. When people purchase a gift card, I don't believe they think they are making a donation to the retailer."
Between 2005 and 2006, several companies claimed millions of dollars in profit for redeemed gift cards, including: $43 million for Home Depot; $43 million for Best Buy; $30 million for Limited Brands; $8 million for Nordstrom; and more than $7 million for Michael's Stores.
"Too many gift cards are not fully redeemed and carry balances that go unspent," said Norma Garcia, senior attorney with Consumers Union. "This bill will help make sure that California consumers get the value out of gift certificates or cards they buy or receive."
Under current law, most gift certificates are barred from having expiration dates and service fees. However, gift cards less than five dollars can be subjected to dormancy fees and a store can refuse to give the remaining value back in cash no matter how small the value left on the card.
"I believe, as a state senator it is important to work on issues that make life easier for my constituents," Sen. Corbett said. "This is a bill that everyone can relate to and understand. I am hopeful that the governor will sign this very important consumer legislation."
The governor has until October 14 to take final action on SB 250 by either signing or vetoing the bill.