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Should the government take the balance on your gift cards?

Have you spent all of the balances on gift cards you received for Christmas? If not, the government is here to help.

 

Some Washington state legislators want the state to adopt what’s being called the “Washington Gift Card Accountability” bill. Apparently, they think it’s a big issue when you leave balances on your gift cards for too long.

 

Gift card spending alone last year hit nearly $30 billion – an average of about $50 per card and $167 per person, according to the National Retail Federation. Most of us won’t spend that money right away. In fact, there’s a good chance you have a gift card with a balance somewhere around your home.

 

So, who does that balance belong to? The answer, of course, is you, even if it is hidden in a drawer somewhere.

 

But the government answer is a little more complicated. You see, in some other states retailers must return that unspent gift card balance. But there’s a catch. It doesn’t just go back to you in the form of a check – it must go through the state’s unclaimed property programs. And if you don’t know it’s in that program or how to claim it, well then that’s just too bad. But rest assured, the government will be glad to spend it.

 

Activists bemoan the fact that gift card balances are claimed as “revenues” to companies like Starbucks. They call this a “loophole.” Instead, they want the money to be used for “public good.”


Under the legislation, a gift card becomes state unclaimed property if it remains unclaimed for more than three years after becoming payable or distributable. In other words, you’ve got 36 months – and you’re on the clock.


It’s easy to understand why this is bad public policy. If your grandmother gives you a sweater for Christmas, and you never use it, does the government get to seize that too?


The real issue seems to be the distain some legislators have for letting companies claim gift card balances as revenues. But Washington state law already provides that gift cards can never expire, so what problem, exactly, are we trying to solve?

 

The responsibility, ultimately, lies with the consumer who owns the gift card. If they choose not to spend it at any given time, that is their choice. Maybe they’re saving up, or perhaps they just don’t shop at the place where they received the gift certificate. Either way, it doesn’t mean that they want it to go to the government.

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