bonnie Posted July 13, 2009 Share Posted July 13, 2009 http://online.wsj.com/article/SB124605742408663533.html Some states faced with sinking tax collections and rising debt are going after unused gift cards that bolster their revenue. South Carolina is considering legislation that would give the state the right to collect unclaimed gift-card credit. A similar measure in Texas to allow the collection of unused credit even from cards that have no expiration date passed that state's House this spring and stalled in the Senate. Texas already collects unused gift cards with expiration dates. Since the recession began, states have been aggressively tapping so-called abandoned property -- anything from gift cards to dormant bank accounts and safety-deposit boxes. About half the states collect unused gift cards after a period of two to five years. States are "looking under every rock," said Mary Bernard, a tax expert at Kahn, Litwin, Renza & Co., an accounting and business-consulting firm based in New England. Each year Americans spend about $65 billion in gift cards -- excluding bank-issued prepaid cards -- but don't redeem $6.8 billion, according to research by TowerGroup, a financial-consulting firm. What happens to the unused amounts varies by state and company, but they often revert to retailers as income. States that collect abandoned gift cards require retailers and third-party gift-card processors to update a database keeping track of when a card is issued and when it is used. The National Retail Federation said retailers have opposed efforts to extend states' reach into unredeemed gift cards. "We've never understood why the state considers this money abandoned property," said Jim McGregor, director of government affairs at the Maine Merchants Association, a retail businesses advocate. Maine collects unused gift cards after two years. Retailers are also unhappy about states' attempts to go after gift cards that have no expiration date. "One of the benefits of offering gift cards which never expire is that it affords the guest the opportunity to use them at any time," said Target Corp. spokesman Eric Hausman. "The proposals under consideration would essentially impose an expiration date on our gift cards." Meanwhile, consumers are also turning up at cash registers to trade in long-forgotten gift cards for anything from groceries to designer clothes, said Scott Krugman, a spokesman for the National Retail Federation. Between states' efforts and recession-strapped consumers, retailers are "getting squeezed," he said. Many retailers shift unused gift-card credits from a liability account to an income account, or use them to reduce operating expenses based on the assumption that the cards -- even those that don't expire -- will never be used after a certain period of inactivity, according to TowerGroup's Brian Riley, a research director. View Full Image States Set Sights on Unused Gift Cards Getty Images Some states faced with sinking tax collections and rising debt are going after unused gift cards that bolster their revenue. States Set Sights on Unused Gift Cards States Set Sights on Unused Gift Cards Home Depot Inc. reported $37 million in revenue from unused gift-card credit in 2009, according to Securities and Exchange Commission filings. Last year, American Eagle Outfitters Inc. collected more than $12 million, according to annual financial statements. States say the gift-card laws are intended to help consumers get their money back, not to line government coffers. They say they are better than companies at tracking down and contacting gift-card owners about their unused funds. But most states are unable to attribute more than a small fraction of the abandoned property. Gift-card owners are particularly difficult to track because retailers usually sell them anonymously to protect consumer privacy. The state of New York, which faces a $7.4 billion budget deficit, collected $9.6 million in unredeemed gift cards last year, according to data provided by the New York state comptroller. At the close of the fiscal year ended in March, $691 million from the state's abandoned-property fund, which includes anything from uncashed payroll checks to forgotten bank accounts, was transferred to the state's general fund. For many years, states cooperated with consumers to pressure retailers to eliminate so-called dormancy fees, amounts subtracted from unused gift cards. "Now the state is trying to capture those funds," said Joe Ridout, consumer-services manager at Consumer Action, a consumer-education and advocacy group in San Francisco. New laws enabling states to tap into gift cards stretch unclaimed-property laws away from their original purpose of reuniting owners with their lost goods, according to Robert Peters, managing director at Duff and Phelps, a business consulting and investment-banking firm. When the owner is unknown, "there's nothing much we can do," said Ron Schubin, director of reporting operations for the New York state comptroller. New York returned to their rightful owners around $2,150 in unredeemed gift cards last year. Correction Washington state doesn't collect abandoned retailer gift certificates and cards issued after July 1, 2004. The chart accompanying this article incorrectly identified Washington as one of the states that collect the full face value of unclaimed gift cards. Quote Everything you do is based on the choices you make. It's not your parents, your past relationships, your job, the economy, the weather, an argument, or your age that is to blame. You and only you are responsible for every decision and choice you make, period ... ... Wish more people would realize this. Quotes by Susan Gottesman Link to comment Share on other sites More sharing options...
Dr. Shane Posted July 13, 2009 Share Posted July 13, 2009 So are the states taking the entire amount from the unused gift card or just the portion that would have been paid in sales tax? I would agree with the state taking the portion that would have been paid in sales tax but taking more than that is a money grab. Quote Pastoral Family Counselor... Find me at www.PostumCafe.com Author of Peculiar Christianity Link to comment Share on other sites More sharing options...
bonnie Posted July 13, 2009 Author Share Posted July 13, 2009 HEY BONNIE THAT is interesting how the different states are trying to get money for their budgets dgrimm60 A really novel idea would be to stp spending so much Quote Everything you do is based on the choices you make. It's not your parents, your past relationships, your job, the economy, the weather, an argument, or your age that is to blame. You and only you are responsible for every decision and choice you make, period ... ... Wish more people would realize this. Quotes by Susan Gottesman Link to comment Share on other sites More sharing options...
Members phkrause Posted July 13, 2009 Members Share Posted July 13, 2009 The funny thing bonnie is, I heard that all the european countries are thinking about spending now. Even though at the time when Obama was there, they were telling him they disagreed with him,but now it looks like they are going to anyway. Not exactly sure where I heard that, I think it was the news on TV. pk Quote phkrause By the decree enforcing the institution of the papacy in violation of the law of God, our nation will disconnect herself fully from righteousness. When Protestantism shall stretch her hand across the gulf to grasp the hand of the Roman power, when she shall reach over the abyss to clasp hands with spiritualism, when, under the influence of this threefold union, our country shall repudiate every principle of its Constitution as a Protestant and republican government, and shall make provision for the propagation of papal falsehoods and delusions, then we may know that the time has come for the marvelous working of Satan and that the end is near. {5T 451.1} Link to comment Share on other sites More sharing options...
bonnie Posted July 13, 2009 Author Share Posted July 13, 2009 The funny thing bonnie is, I heard that all the european countries are thinking about spending now. Even though at the time when Obama was there, they were telling him they disagreed with him,but now it looks like they are going to anyway. Not exactly sure where I heard that, I think it was the news on TV. pk Don't know about the others but Germany announced they are cutting taxes to stimulate growth. Quote Everything you do is based on the choices you make. It's not your parents, your past relationships, your job, the economy, the weather, an argument, or your age that is to blame. You and only you are responsible for every decision and choice you make, period ... ... Wish more people would realize this. Quotes by Susan Gottesman Link to comment Share on other sites More sharing options...
Members phkrause Posted July 13, 2009 Members Share Posted July 13, 2009 I hear what your saying but I know that Bush did a few of those and it didn't seem to help much, we still went into a recession. I think Obama is finding that the other way isn't helping either. pk Quote phkrause By the decree enforcing the institution of the papacy in violation of the law of God, our nation will disconnect herself fully from righteousness. When Protestantism shall stretch her hand across the gulf to grasp the hand of the Roman power, when she shall reach over the abyss to clasp hands with spiritualism, when, under the influence of this threefold union, our country shall repudiate every principle of its Constitution as a Protestant and republican government, and shall make provision for the propagation of papal falsehoods and delusions, then we may know that the time has come for the marvelous working of Satan and that the end is near. {5T 451.1} Link to comment Share on other sites More sharing options...
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