AOI Helps Highlight Flaws in Gift Card Bill

Published Thursday, March 9, 2017

Ever found a gift card that you lost or set aside several years earlier and wondered whether it was still usable? Since 2007, the answer in Oregon has been yes, because of a requirement that gift cards be issued without expiration dates.

SB 113 effectively would change that. If a card went unused for five years, the balance would go to the Department of State Lands. Betsy Earls, representing Associated Oregon Industries (AOI), the Oregon Retail Council (ORC) and Oregon Business Association (OBA), and Shawn Miller of the Northwest Grocery Association (NWGA), articulated the flaws in the bill so well at a Senate Committee on General Government and Accountability hearing Wednesday that the bill's sponsor acknowledged that it "clearly is not ready for prime time."

This was not the first effort to divert gift card balances. SB 113 is similar to a bill that was introduced in 2015 but never left committee. That bill would have classified gift cards as unclaimed property if they went unused for three years. Earls, Miller and members of the committee identified several reasons that diverting unused gift card balances to the state is bad for consumers and retailers:

  • Most gift cards are issued by out-of-state corporations. Rules in the issuing state apply to cards, so Oregon could not access those unused balances.
  • The Supreme Court of the United States has established priority rules for ownership of unused gift cards. SB 113 could create a conflict with those rules.
  • The unclaimed balances would be held by the state for consumers. The only money that the bill would create for the Common School Fund would come from interest on the balances, and that would be a small amount.
  • The bill would disproportionately affect small retailers, who would face the difficult decision of telling customers who came in with old gift cards that the state had their money or honoring the card and absorbing the loss.

AOI and the Retail Council will continue to monitor this and other issues that hinder retailers' ability to serve their customers.