Bill to bar expiring gift cards advances

State Senate votes 36-8 for measure

passage is uncertain in House

March 13, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

Bowing to pressure from shoppers, the state Senate voted 36-8 to pass a bill yesterday that would prohibit gift cards and certificates from expiring or losing value.

The gift cards, which climbed in popularity during the last holiday season, have drawn some criticism from consumers who did not realize that some shops would not honor them indefinitely or would begin deducting a dollar or two a month if they went unused for a year or more.

Several states have prohibited retailers from placing restrictions on gift cards in recent years, but such efforts have failed in Maryland with some retailers opposing the move.

"This is something which affects us all," said Sen. Kathy A. Klausmeier, the Baltimore County Democrat who sponsored the bill. "I have constituents get up at community meetings and pull out their wallets and show me gift cards that have expired. When people lay out their cash, they should be able to get what they paid for."

The bill goes next to the House, where its prospects are less certain. A similar bill died in both House and Senate committees last year, and there's been no action yet on a similar House bill this year sponsored by Del. Joseph C. Boteler III, a Baltimore County Republican.

"I'm not very hopeful because we just haven't been hearing a lot from the public on this, which is surprising because if you ask people, they tell you it bothers them," Boteler said. "If it doesn't pass, then I hope the marketplace will drive itself in that direction. If it doesn't, I'll be back with my bill again next year."

Several national retailers are moving in that direction. Target, Gap and Home Depot, among others, have already stopped charging fees and lifted expiration dates.

The Senate bill reflected a compromise worked out with Wal-Mart and others that would permit limited fees in some cases but require clear disclosure on the cards. Charities would be exempt and retailers would be allowed to charge a fee of $1 a month if there was less than $5 remaining on a card not used in two years.

The legislation mirrors a law in California, the first state to pass such legislation in 1997.

But the Maryland Retailers Association contends the bill is still too restrictive.

"We support a disclosure bill, one where the terms are easy for the consumers to see and understand," said Tom Saquella, president of the association. "Retailers should be able to do a service fee if they want or an expiration date, as long as the consumer knows. We'll work toward that."

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