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January 11, 2005

The Gift That Keeps on Giving

You may have seen state Sen. David Adelman (D - DeKalb Co) on Fox 5 last night talking about his gift card integrity act. It was introduced last session, and basically takes aim at gift cards that fleece the consumers who purchase them. Many cards actually charge you money simply to check the balance, or lose $2 a month to inactivity fees, or in the case of one egregious offender, require a $7.50 reactivation fee if you don't the use card within a certain period of time.

Basically, Adelman believes that the cards should be just like giving a gift of cash, and sought to ban all dormancy fees. After all, when you purchase the gift card, you are making an interest free loan to the store and the money that the store makes on what is called the "float" should be more than enough to pay for the convenience that comes with the gift card.

Last session, Adelman introduced the Gift Card Integrity Act; unfair consumer transactions of gift cards bill. It did the following:

prohibit the imposition of nonuse, handling, dormancy, or maintenance fee on gift cards and gift certificates issued by merchants or persons acting on behalf of merchants

This year, Adelman's co-sponsor from last year, Sen. Mitch Seabaugh (R - Big Business) has teamed up with Sen. Chip Rogers (R - Banking Industry Shill) and sponsored their own bill, with the exact same title. So, did they steal Adelman's bill?

Not exactly. Instead of banning outrageous dormancy fees -- which sometimes eat up the entire value of the card -- Seabaugh and Rogers aim to

provide that the terms of gift certificates, store gift cards, and general use prepaid cards shall be disclosed at the time of purchase and through certain notifications
So that's the difference. Let gift card issuers continue to rip off consumers, but just make sure they are a little more upfront about it. I guess Georgia Republicans idea of consumer protection is protecting big business from consumers. They should be ashamed of themselves for pulling stunts like this.

Posted by Chris at January 11, 2005 03:13 PM

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