Tuesday, January 17, 2006
Consumers complain about cards' expiring and fees' being added.
COLUMBUS (AP) -- People who misplace gift cards or don't use them right away would not have to worry about them expiring for two years under a bill that would require that minimum life for the cards.
The measure, which passed the Senate in June, also would prevent retailers from charging fees that reduce the value of the cards during that time.
Sen. Robert Spada, a North Royalton Republican, said he introduced the legislation after getting complaints from family, friends and constituents who were concerned that their gift cards were no longer usable when they tried to redeem them.
"I thought it was a great idea that when you want to give a gift to a friend or family person, they actually get to use the gift," he said.
The bill has been held up in a House committee, where representatives have been working to clarify which cards would be covered. About a dozen states have passed laws regulating gift cards' expiration dates.
The National Retail Federation estimated that the average customer would spend about $88 on gift cards during the holiday season.
What consumers think
William and Glenna Bigelow said they know what it's like to open a drawer and discover a gift card that had been misplaced and has since expired, so the proposed law would be helpful. The suburban Columbus couple said they also have had cards that started deducting fees if they were not used within a set time.
Jeff Maxwell, 41, of Columbus, said he hasn't had much trouble with gift cards, but the bill doesn't go far enough.
"I think if you're purchasing something from a store, it should be valid as long as that store is in business," he said.
Attorney General Jim Petro's office has received about 460 complaints about gift cards in the past five years, including about 77 in the past year, spokeswoman Michelle Gatchell said. She said the complaints included expiration dates and extra fees.
But Lora Miller of the Ohio Council of Retail Merchants said expiration dates are often necessary to prevent problems with taxes and accounting.
"In general, we think it should be left up to the free market," Miller said.
The group opposed a previous proposal that would have banned any expiration dates for the cards, but took a neutral position this time because Spada worked with the council on a compromise, Miller said.
Retailers react
Some retailers have voluntarily stopped charging fees and adding expiration dates in the last few years in response to customer complaints and bad publicity, said Evan Johnson, an administrator for the Division of Consumer Affairs in Montgomery County, Md. The department has conducted an annual survey of gift cards since 2003.
In the first survey, 18 of the 30 gift cards analyzed had fees or expiration dates attached. That number had dropped to nine in last year's survey, Johnson said.
"I think the word got out and some companies got embarrassed," Johnson said.
Rod Paulette, 39, of Columbus, who used a gift card he got for Christmas at a Starbucks coffee shop Sunday, said he liked the idea of a law regulating the cards. He said the cards make gift-giving easier.
"You don't know what they want and people don't know what they want half the time," he said.
Spada said he wanted to include cards sold by companies such as Visa and MasterCard, but the idea met too much opposition.
The federal government also is investigating gift card practices. In December, two members of the House Energy and Commerce Committee asked the Federal Trade Commission to look into how gift cards are marketed, sold and used. A report is due in February.