HARRISBURG – With the expected increase in gift card sales this holiday season, State Treasurer Robert P. Casey Jr. is recommending that Pennsylvanians who purchase gift cards be aware of possible fees and card expiration dates which can take effect as early as six months after the purchase dates.
“As the popularity of gift cards increases, so, too, does the responsibility to educate the people who buy and receive them,” Casey said. “It is important for holiday shoppers to understand the policies that govern gift cards and the various transaction, service, inactivity and convenience fees that may be imposed on them,” Casey said.
The National Retail Federation estimates that gift card sales across the country for the 2006 holiday season will total about $25 billion, a $6 billion increase over 2005.
Casey urges people to use gift cards as soon as possible to minimize the chances of the cards being lost, stolen, or expired. Casey also said that consumers should carefully read the policies of each business from whom they purchase gift cards because many gift cards have restrictions or service fees that reduce their value over time.
Casey suggests that a consumer with an expired gift card first ask the business to honor the card anyway. If the business refuses, the consumer should check with Treasury’s Unclaimed Property Bureau to see if the money has been reported to the Commonwealth as unclaimed property. The consumer must have the actual gift card to prove ownership in order for Treasury staff to help them get either the money they are owed or the services they were promised by the card. Saving gift card receipts may also help encourage businesses to honor expired cards or reissue cards that have been lost or stolen.
In November, Gov. Edward G. Rendell signed legislation recommended by Casey which provides incentives for businesses that choose to issue cards that do not expire or charge dormancy fees. Act 138 of 2006 exempts gift cards and gift certificates that do not carry maintenance fees or expiration dates from having to be turned over to the commonwealth as unclaimed property.
“This new law is positive for both businesses and consumers,” Casey said. “It allows consumers to redeem merchandise from these gift cards at anytime, rather than having to wait until the funds are turned over to the state and then filing claims. At the same time, businesses will be relieved from having to report such unredeemed gift cards to the Commonwealth as unclaimed property.”
Before this legislation was passed, businesses were required to report unredeemed gift cards to the Treasury Department two years after their expiration date, or five years after their purchase date if they did not expire. Consumers who held expired or old gift cards had to wait until the end of the dormancy period in order to claim the money that was rightfully theirs because the Treasury can only pay a claim for an unredeemed gift card after verifying that the business reported it as unclaimed property.
The commonwealth is currently holding over $7 million in unclaimed gift card funds, according to Casey. Since January 2005, the Pennsylvania Treasury Department has collected over $1.3 million in unclaimed gift card funds from businesses and returned over $158,000 to gift card owners.
Casey said it is difficult for Treasury to refund money to gift card owners because the issuers of gift cards typically do not collect the names and addresses of card purchasers or recipients. In cases when a business does turn over unredeemed gift card monies to the commonwealth, Treasury has no way of knowing who is entitled to the money, and therefore, cannot advertise the names as part of its due diligence efforts to reunite people with their property.
To find out if the Treasury Department is holding unclaimed gift card funds or other unclaimed property in your name, contact the Bureau of Unclaimed Property toll-free at 800-222-2046, or search the Unclaimed Property data base on Treasury’s Web site.
Under the Pennsylvania Disposition of Abandoned and Unclaimed Property Act, the Commonwealth is responsible for custody and control of abandoned and unclaimed financial assets. The Treasury Department is responsible for returning that property to its rightful and lawful owners. In the meantime, the money from unclaimed property is placed in the state’s General Fund.
Unclaimed property typically includes: bank accounts that become inactive, checks, including paychecks, that are not cashed; stocks and bonds whose owners cannot be found; contents of safe deposit boxes that become dormant; proceeds from the demutualization of insurance companies; and expired gift cards that are not redeemed.
The Treasury Department is seeking the owners of over $1 billion in cash and property. Since January 2005, Treasurer Casey’s staff has returned over $197 million to more than 100,000 owners.
