Slashdot Mirror
WA Bans Gift-Card Expirations, Fees
theodp writes "The Seattle Times reports on new legislation that makes WA one of 15-20 states that have passed or are in the process of adopting laws that ban expiration dates on gift certificates, which enjoyed sales of $40+ billion last year. The consumer protection law is also expected to address the cat-and-mouse games retailers play of shopping for states with unclaimed-property laws that allow them to pocket unused gift-card value. As it so happens, Delaware state law requires a company to send unclaimed gift certificate monies to the state, while Idaho allows a company to keep the cash for itself. While an Amazon.com spokeswoman said the company would adhere to the new WA law for WA residents, she declined to say why the Seattle-headquartered and Delaware-incorporated Amazon established an Idaho company two years ago called A2Z to handle its gift-card operations."
If expiration dates on gift certificates are banned, how do they determine when a gift certificate is 'unclaimed'?
I'll elaborate:
1. First of all at the initial purchasing of this piece of plastic/paper, the retailer gets straight up cash with no physical loss of goods until possibly months later. In that time the money could be used for all sorts of useful things.
2. People who receive gift certificates feel obligated to use them to their full amount, otherwise they will lose the value of the card. The only problem is few things are exactly worth $20, so the consumer is forced to either pay up their own money for something, or buy something for less than the value of the card.
3. Gift certificates can't be banked or deposited, they can only be storted in some physical location, making them far easier to lose than money.
Don't get me wrong, I don't mind buying or receiving gift certificates. They have saved me tons of time buying gifts. But I think it's clear retailers are getting quite a deal out of it.
Corporations: your universal scapegoat for all society's ills.
It should be of no surprise, especially to investors, that a company like amazon would use the law to their advantage and open A2Z where they did. Bezos (and his cohorts) have made amazon one of the most popular online shopping sites in the world with alliances including cdnow, toys r us, office depot, circuit city, and others. Their stock has been doing very well for a while now.
Lets not forget the best part of online gift certs.. you can buy them the same day you need them, from your work, because you forgot about your 's birthday/anniversery, etc.
There are a couple of reasons gift certificates are popular.
Firstly, giving a GC shows that you actually went out to the store and shopped for them. Many people equate cash presents with "Oh, so you forgot it was my birthday until the last minute?"
Secondly, a GC can force the recipient to make a certain type of purchase. Cash gifts often wind up being spent on groceries, or rent, or gasoline. If you give someone a Best Buy GC, you can be fairly certain they'll buy a fun luxury item, rather then some mundane everyday necessity.
2. People who receive gift certificates feel obligated to use them to their full amount, otherwise they will lose the value of the card. The only problem is few things are exactly worth $20, so the consumer is forced to either pay up their own money for something, or buy something for less than the value of the card.
This is probably the biggest benefit to the retailers. I myself just received a 300-yen gift certificate from amazon.co.jp good for three months or so, and while I know enough about the system not to run out and spend it (plus my own money) on some random thing, I have to admit the temptation is there to find something I'd want anyway and get it before the gift certificate expires.
If Japan had a law preventing expiration, that psychological pressure would definitely be lessened.
That's not shady. They're not even working around a law, they're doing something that's expressly legal.
Personally, I don't see the point for these laws. I live in a state that either has a no-expiration law or extends the expiration to something ridiculous like 7 years (I can't remember which), but I can't remember the last time I kept a gift card for more than a month or two. Are people really burying these things? A year is still a lot more generous than the 60- or 90-day expiration on a personal check (not a comparable analogy, I know).
Interested in open source engine management for your Subaru?
A gift certificate is like an anonymous savings account that bears no interest and can only be used at one company.
Contribute to civilization: ari.aynrand.org/donate
...all the thought of cash, just not as good.
Seriously, why do people give these things? **NOBODY** wouldn't rather have cash. I suppose people think that it proves that they put some kind of thought into it, but they're wrong. "Oh, he's a techie person, give him a CompUSA gift card." Gee, thanks. If I had cash instead I could get the tech stuff I *want* instead of what CompUSA happens to have. Or maybe my car is broken this week, but it's hard to get the mechanic to take a $100 CompUSA card in payment.