With the holiday season already under way, state legislators are looking to protect consumers during the gift-giving season.
With support from Gov. Jennifer Granholm to strengthen protections on gift cards, the state House passed a package of bills for last week gift certificates and cards.
“We’ve had a lot of situations where people are given a gift card and it isn’t the right value because of charges made against them or they are nonfunctional because of an expiration date they weren’t aware of,” said Rep. Mark Meadows, D-East Lansing, who introduced the legislation.
The list of bills included prohibiting retailers from selling gift certificates or cards that have an expiration date less than five years after the purchase.
Also included was prohibiting charging inactivity fees or other service fees, requiring retailers to disclose all of their terms and conditions to a prospective purchaser and limiting the state’s ability to claim the value of unclaimed gift cards and certificates.
Retailers would be fined up to $25,000 if they violated any of the conditions, Meadows said in his report to the district.
“The Governor is supportive of these bills all about protecting pocketbooks,” said Megan Brown, spokeswoman for Granholm.
“Consumers are getting the most from their dollars as we move into this holiday season. Gift cards are a worry-free solution to gift giving that consumers should be able to enjoy freely.”
Sometimes businesses are subject to the terms of companies who provide the cards for businesses to use as gift cards.
Douglas J gift cards notify users that after 12 consecutive months of inactivity, a surcharge of $2 a month is deducted from the remaining balance of the card.
Other businesses, like Espresso Royale, 527 E. Grand River Ave., don’t have restrictions and allow users to keep gift cards while continuing to add money to them.
Most cards are not redeemable for cash, said Chris Vryner, an Espresso Royale employee.
The legislation, however, is not scheduled to take effect until Sept. 30 for next year’s holiday season.
“A lot of businesses came in and said they already purchased cards,” Meadows said.
“It would be a big expense for them to change their cards.”
The bills also would mandate that retailers not refuse accepting a gift certificate during a sale, closeout or liquidation, alter any terms after the gift certificate has been issued or refuse to accept a certificate as a portion of a payment.
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