TRENTON – Legislation sponsored by Senator Joseph Coniglio 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.
“There is a basic expectation that a gift card will be treated the same as cash at the store we purchase it from,” said Senator Coniglio, D-Bergen. “However, some retailers have come to use expiration dates and hidden dormancy fees to reduce the value of these cards and increase their profit margins. Consumers deserve to know the terms and conditions of any gift card so they know exactly what they are buying.”
Senator Coniglio’s bill, S-2296, 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
“In recent years, gift cards have grown to comprise a large share of retail gift sales, especially around the holidays. This legislation makes it more difficult for banks and retailers to pad their profits by imposing fees that diminish the value of unused gift cards. We know that consumers should be given a reasonable amount of time to make a purchase before they see their gift disappear,” added Senator Coniglio.
The bill passed by a vote of 5-0 and now goes to the full Senate for their approval.