TRENTON – Legislation sponsored by Senators Joseph Coniglio, Joseph Vitale and Nia Gill that would require retailers offering gift cards to disclose expiration dates and other conditions on those gift cards at time of purchase and restrict the fees that retailers can charge to gift card holders that carry a balance on the card passed the Senate Commerce Committee today.
“I think that when anyone buys or receives a gift card, they expect that it will be treated the same as cash at the store we purchase it from,” said Senator Coniglio, D-Bergen. “Unfortunately, some retailers have come to use expiration dates and hidden dormancy fees to reduce the value of these cards and increase their profit margins. Before buying a gift card, consumers deserve to know the terms and conditions of that card so they know exactly what they are buying.”
The bill, S-2187, 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 and through a telephone number printed on the card. The bill would also prohibit dormancy fees on gift certificates or cards within the first 24 months after their issuance and limit their amount to no more than $2 a month
“Gift cards continue to grow as a share of retail gift sales, especially around the holidays. Neither retailers nor malls should be able to pad their profits by imposing fees that unfairly diminish the value of unused gift cards. All consumers should be given a reasonable amount of time to make a purchase with their gift before they begin to see it disappear,” explained Senator Vitale, D-Middlesex.
“It’s not uncommon for an individual to tuck a gift card away in their wallet or purse and forget they have it for as long as a year. We want to make sure that those gift cards are worth just as much two years later as they were on the date of purchase. It seems like a more than reasonable amount of time for both consumers and retailers to expect a gift card to be used in,” added Senator Gill, D-Essex and Passaic.
The bill passed by a vote of 36-0 and now goes to the Governor for his signature.