(The Center Square) – It’s the gift-giving season, and plenty of Washington residents will likely find retailer gift cards stuffed in their stockings again this year.
But many of those Starbucks, Nordstrom, and REI gift cards go unused by consumers. And while they don’t expire in this state, if a person doesn’t use a gift card or funds on a mobile app from a Washington-based retailer after three years, current law allows those monies to return to the company as profit.
That’s an issue two state lawmakers – Sen. Yasmin Trudeau, D-Tacoma, and Rep. Emily Alvarado, D-Seattle – want to address in the upcoming 2024 legislative session.
“Consumers are losing millions of dollars due to unused gift cards, resulting in unfair corporate profit, and that’s simply unacceptable,” Trudeau said in a press release earlier this week. “This legislation ensures that large corporations comport with processes, similar to those around the country, that meet consumer expectations of how they can access their own hard-earned money.”
“While gift cards and mobile apps have grown into a billion-dollar industry, our state laws haven’t grown and changed to help consumers,” said Alvarado. “These are common-sense protections for people and accountability for corporations.”
To close a loophole dating back to 2004, the two are proposing legislation that would send the cards’ unused balances to the Washington Department of Revenue’s “Unclaimed Property” website, where people could find their missing funds.
The proposed legislation also addresses other consumer protections for gift cards, including:
allowing consumers to cash out small amounts on gift cards or mobile apps;requiring big corporations to notify consumers about unspent gift cards;letting consumers reload gift cards and mobile apps at amounts they desire instead of high minimums.
Small businesses with annual revenue under $25 million would be exempt from the reforms, said Trudeau and Alvarado.
According to the Washington Community Action Network, the amount of unspent gift card money retained by large Washington retailers in 2004 was valued at $4 million, but has since grown to $255 million this year.
If the legislation is enacted as proposed, consumers could recoup their money through the state’s unclaimed property site. From there, any unreturned monies held by the state could eventually go toward public services such as education, healthcare, or housing, according to WA CAN.
“Over 70 percent of Fortune 500 companies send unspent gift card money back to the states in which they are incorporated, where it can be returned to consumers in the form of public services,” WA CAN says on its website. “In Washington, this law would add approximately $2.5 billion over 10 years for vital public services. That means a stronger education system, healthier communities, and more affordable housing.”
