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Vitale-Gill Bill To Protect Gift Card Consumers Advances

TRENTON – A bill sponsored by Senators Joseph F. Vitale and Nia H. Gill which would enact a number of protections for gift card consumers, including a provision requiring that gift cards could not expire within a two-year period after purchase, was approved by the Senate Commerce Committee today.

“Many people save a gift card for a rainy day, but with little in the way of regulation, they may be surprised at the register to find that their gift card is either no longer valid, or has been severely diminished in value,” said Senator Vitale, D-Middlesex. “Businesses should not be allowed to take advantage of their customers’ delay in redeeming gift cards, especially when such a delay may be no fault of the redeemer in the first place. Reasonable regulation is more than fair, and will put New Jersey at the forefront of consumer protection in regards to gift cards.”

“In gift-giving, the old axiom is that it’s the thought that counts, but the thought that a gift-recipient wouldn’t be able to redeem the full value of their gift seems absurd,” said Senator Gill, D-Essex and Passaic, the Vice Chair of the Senate Commerce Committee. “Consumers of gift cards need the same protections that we afford consumers of material goods, because the intent and value of the gift is established when money changes hands at the cash register. Retailers need to honor the original intent and make the full value of the gift card available, regardless of when it is redeemed.”

The bill, a Senate Committee substitute for S-2187 and S-2296, would require that gift cards sold within New Jersey could not expire within a 24-month period following purchase. The bill also would require that no dormancy fees, charged by some stores on unredeemed gift cards, be levied until after the 24-month period, and that dormancy fees could not exceed more than $2 a month.

“Currently, dormancy fees are charged almost arbitrarily, and in most cases, a gift card purchaser has no way of knowing any of the specifics regarding the fees,” said Senator Vitale. “This bill would make dormancy fees, if charged, a standard amount, so that consumers aren’t surprised when the face value on the card is much less when they go to redeem it.”

Finally, the bill requires that if there are expiration dates or dormancy fees on any gift card, that such provisions be included on the card in large enough type to read clearly. The retailer would also have to provide a telephone number for the consumer to call and obtain additional information regarding expiration dates and dormancy fees.

“By notifying gift card recipients of the provisions right on the card, we are letting them know that they have to use the card by this time, or they’ll be subject to fees or expiration,” said Senator Gill. “An informed consumer would be able to avoid any penalties built into the gift card agreement, but as it currently stands, consumers have no access to this information, and are practically blind-sided with dormancy fees and expiration that cut down the value of the gift.”

The bill now heads to the full Senate for consideration.

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