Assemblymember Kevin A. Cahill Backs Legislation Eliminating Hidden Fees on Gift Certificates and Gift Cards

June 22, 2004

Assemblymember Kevin Cahill (D-Ulster and Dutchess Counties) announced that legislation he sponsored to protect consumers from hidden fees and undisclosed conditions that have become common with gift certificates and gift cards has passed both houses of the Legislature.

"Many consumers are discovering the hard way that all gift certificates and gift cards are not created equal. Certain companies impose hidden fees that nibble away at the face value of gift certificates and gift cards after certain spans of inactivity," Assemblymember Cahill said. "These bills will ensure consumers know exactly what the terms are when purchasing a gift certificate or gift card and more importantly, get what they pay for."

The new legislation would require vendors and retailers to eliminate any retroactive fees and prohibit them from collecting monthly service fees until after a gift certificate or gift card goes unused for 13 months (A.10333-B). Another measure requires vendors to disclose the terms and conditions of a gift certificate or gift card at the time of purchase (A.10334-A).

The attention around this issue has prompted two large sellers of gift certificates and gift cards, Starbucks and Blockbuster, to eliminate fees on their own accord. Unfortunately, many other companies are keeping them, and in some cases, increasing fees.

"As gift certificates and gift cards become an increasingly popular alternative to hand-picked gifts, companies look for more ways to impose fees and increase profits," Mr. Cahill said. "This practice has to end and I urge the Governor to sign this legislation into law so proper guidelines will be set to protect consumers," he concluded.