With the holiday shopping season upon us, we will all be tempted to purchase gift cards for family and friends. These cards can be a practical way to get something for that special person. And, it seems that everywhere you look, from the checkout aisle to newspaper ads, the virtue of these cards is being promoted by top retailers.
Because of their ease and promotion, gift cards have become increasingly popular, with the number issued up more then 34 percent over the last two shopping seasons. This season, consumers across the country are expected to spend $26.3 billion on gift cards.
But anyone who has ever found one of these gifts cards in their purse or wallet months later also knows the frustration associated with gift cards. You go to redeem it, only to find the value has dwindled or disappeared altogether. If you know this feeling, you are far from alone.
According to Consumer Reports and the National Retail Federation, of the $24.8 billion spent on gift cards in 2006, almost 20% -- or an estimated $4.7 billion worth – will never be used. Too often it is because these cards expire or diminish in value before they are redeemed. That is $4.7 billion spent on nothing.
I believe hidden fees and unreasonable expiration dates should not be used as a way to keep our hard earned money that was meant for merchandise. Earlier this year, I introduced legislation along with Assemblywoman Joan K. Christensen (D-Syracuse) that would protect consumers by preventing the unreasonable expiration of gift cards purchased from major retailers. The bill we sponsored would keep the value in individual gift cards for up to 5 years.
If this legislation is passed, it would turn the experience of finding a three year old gift card into the same experience one gets when they find a bill in that forgotten pocket of a jacket.
As we work on building support for this legislation, there are a few things you can do this holiday season to make sure your gift cards go to the intended purpose.
First, before you buy a gift card ask the retailer about the store’s card policy. Ask about expiration dates, dormancy fees, or any other fees associated with the card. Second, consider whether the person you are buying for is likely to use it. Do they shop a lot? Is the store easily accessible to them? Finally, consider giving the card as part of a planned shopping trip. That way you can spend some quality time with the person you bought the card for, and make sure your gift gets used.
With that in mind, I hope every one enjoys the holidays and remembers to support local stores this shopping season.