With the holidays right around the corner, I thought I would update you on the law surrounding the expiration of gift cards. The topic was in the news recently because U.S. Sen. Richard Blumenthal has introduced a bill to congress that would prohibit expiration dates and non-activity fees on gift cards (press release HERE). The bill would also require companies in bankruptcy to honor outstanding gift cards. I don't have any other information on this bill, or the likelihood of its passage, so if anyone else has any information you can let us know in a comment.
I do know, however, that the Illinois Consumer Fraud and Deceptive Practices Act has offered strong protections in this state for several years. The Act prohibits gift certificates, gift cards, or credit slips obtained from the return of merchandise from expiring any sooner than 5 years from their issuance. The Act also bars any non-activity charges whatsoever. 815 ILCS 505/2SS.
Five years is a long time to have a gift card sitting around, but the federal law will ban any expiration dates at all. I think five years is plenty. I'm just thinking from the business' perspective. There has to be a point in time when the business can write-off the amount of the unused gift card and credit that money back onto their books. What do you guys think?
1 comment:
I don't think the company gets to credit it back on their books. I think it is unclaimed property that has to be turned over to the state.
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