by Hans Eisenbeis
- The most popular holiday gifts this year will be clothing, but the second most-common present will be gift cards (NPR.org 11.19.08).
- Yet gift cards are notoriously problematic. Take for example The Sharper Image, which recently went into bankruptcy. The high-tech toy company left consumers holding more than $60 million worth of gift cards that are now worth nothing. And many cards from perfectly solvent companies expire before consumers can ever use them.
- But in these days of Groupsolving and Gross National HappinessSM, many states are passing laws that take the sting out of gift cards. Minnesota passed an aggressive law that eliminates expiration dates, and Michigan, Illinois, and Saskatchewan already mandate a 5-year grace period before expiration (KAALTV.com 11.18.08).
- In Illinois, the state picks up the tab for companies that go out of business, through its unclaimed property database (NWI.com 12.28.07).
WHAT THIS MEANS TO BUSINESS
- In the past, as many as half of all gift cards never got used. That’s likely to change in a deep recession, as consumers turn to all sorts of cost-saving measures like coupon-clipping, bargain-hunting, and cashing in loyalty points.