(West Hartford, CT) – Today, U.S. Senator Richard Blumenthal (D-Conn.) announced the Gift Card Consumer Protection Act, a legislative measure that would completely ban gift cards with expiration dates and non-use fees.
These protections would significantly strengthen present law, which permits expiration of cards after five years, and non-use fees after one year. The new measure would bar such deadlines and dormancy fees at any time.
Blumenthal said, “This bill bars absolutely draconian deadlines and abusive fees and charges that unfairly confiscate consumer gift card cash. Gift card companies fatten their profits and shrink consumer wallets with exploitative expiration dates and petty, underhanded junk fees. Gift cards should not be the gift that keeps on taking. This measure assures that consumers get their money's worth, no matter when they use the gift card.”
“Gift cards are a popular holiday gift that help make sure everyone gets what they want for the holidays,” Chuck Bell, Director of Programs at Consumer Reports, said. “Unfortunately, they may also get things not on their list, like fees and expiration dates on gift cards that limit how and when you use them. Consumers deserve to receive the full value of the gift card and be able to use it whenever they want without fear that the card has expired or is no longer accepted. This bill makes certain that consumers are not short changed when giving or receiving gift cards, even if the issuer files for bankruptcy.”
In addition, the Gift Card Consumer Protection Act would prevent companies that file for bankruptcy from selling gift cards and require them to accept and honor unredeemed gift cards. This provision would prevent consumers from buying or being stuck with a worthless gift card after a company goes out of business. In 2008, the electronics company Sharper Image required customers to spend double the amount on their unredeemed gift cards and then it stopped accepting gift cards altogether after it filed for bankruptcy. In addition, Circuit City and Linen ‘n Things allowed customers to buy gift cards from its stores after it filed for bankruptcy, according to reports.
The Gift Card Consumer Protection Act would also prevent loyalty, promotion, and award cards from expiring. These are cards consumers receive by redeeming credit card points or buying a certain product. Currently, most of these cards have very short expiration dates – sometimes as short as 30 days, which confuses customers who assume these cards have the same protections as gift cards. Under the Gift Card Consumer Protection Act, these cards would have the same protections as gift cards.