Who should benefit from unused gift cards?

When we discovered that consumers were sitting on as much as $972 million in unused gift cards, we knew we'd cause a stir. And judging from these reactions, we certainly did. One thing we didn't expect, however, was the answer to the gift card glut suggested by Wisconsin legislator Fred Kessler. Citing our data, the Milwaukee Democrat has proposed an expiration date on gift cards of one year after their issue date, after which 80 percent of the unused value would go to the state, with the remaining 20 percent going to retailers to cover administrative expenses. Kessler's proposal is a new spin on escheatment laws, which allow states to recover unclaimed assets — including unused balances left on gift cards — after a set period of time. A number of states already have similar laws on the books. Iowa and Indiana, for example, take 60 percent of the balance left on expired gift cards, with the remainder going to the card issuer. While we have no doubt that Kessler feels he's helping his state, we still think the best solution is for consumers to choose only those cards that have no expiration date, purchasing fees or dormancy fees. And if state legislators want to help out, we'd encourage them to follow the examples of California, Connecticut and Montana, all of which have laws that ban expiration dates on gift cards. The card is yours forever — or at least until you lose it at the bottom of the sock drawer or the retailer goes out of business.

— MP