TRENTON – Senator Joseph Coniglio introduced new legislation this week that would require retailers offering gift cards to disclose expiration dates and other conditions on those gift card at time of purchase and restrict the fees that retailers can charge to gift card holders that carry a balance on the card.
“When we purchase a gift card for a friend or relative, we expect that card to be treated the same as cash at that store,” said Senator Coniglio, D-Bergen. “However, through the use of expiration dates and dormancy fees retailers are attempting to make an exorbitant profit from these cards.”
Senator Coniglio’s bill, S-2296, requires gift cards to be redeemable at full unused value until presented in exchange for merchandise, unless any and all conditions and limitations are disclosed to the purchaser of the gift card at the time of purchase and conspicuously printed on the gift card. The bill also requires that when a gift card’s expiration date is within 18 months of the purchase date, that the expiration date is printed on the card in the same font and size used for the majority of the text on the gift card.
The bill also addresses the increasingly common practice of accessing “dormancy fees” on a gift card that hasn’t been used in a set amount of time. The bill would require all dormancy fees to be disclosed at the time of purchase, or through a telephone number printed on the card and would prohibit dormancy fees on gift certificates or cards within the first 18 months after their issuance and within the 18 months immediately following the most recent transaction in which they were used.
“With gift cards beginning to comprise such a large portion of retail gift sales, it is important that we prevent banks and retailers from padding their profits by diminishing the value of unused gift cards. Consumers should be given a reasonable amount of time to make a purchase before they see their gift disappear and they should be able to quickly and easily tell how long that time period is,” added Senator Coniglio
The bill awaits consideration by the Senate Commerce Committee.