Gift card reform sought

? That $25 gift card from grandma could languish longer in the desk drawer without losing its value under a bill considered Tuesday by a House committee.

The measure would eliminate expiration dates on gift certificates and gift cards, and allow recipients to exchange the cards for cash. Businesses that violate the proposed law would be subject to fines of up to $5,000.

“I think it’s a good consumer advocacy issue,” Rep. David Huff, the bill’s author, told the House Commerce and Labor Committee.

Huff, R-Lenexa, was backed by several colleagues who testified in favor of the bill.

Rep. John Edmonds, R-Great Bend, said vendors who use service charges, expiration dates or other devaluing mechanisms were “unconscionable.”

But business lobbyists weren’t thrilled with the idea.

The $5,000 penalty would be too much, said Ron Hein, legislative counsel for the Kansas Restaurant and Hospitality Assn.

“It’s like killing a gnat with a sledgehammer,” he said.

With no expiration date, Hein said, businesses would be unable to clear the cards from their books or recover the cost of accounting and marketing.

Hein also said allowing people to cash in the cards could have unintended consequences such as when parents give their children cards for a specific purpose, and the youths instead cash them in for their own purposes.

The committee took no action on the bill. Instead, Chairman Donald Dahl, R-Hillsboro, instructed Huff to work with Hein on drawing up legislation.

“If there are some things you could come up to a consensus on, it might improve this bill,” Dahl said.

The Kansas Chamber of Commerce said it had concerns with the measure, too.

Jeff Glendening, vice president of political affairs for the chamber, said businesses offer the cards as a convenience to the customers.

“If too many restrictions are placed on them, the value of issuing them may be diminished,” he said.

But Huff and Edmonds said it was the businesses that were benefiting by selling the cards.

Several lawmakers and the attorney general’s office said they had received complaints from people who had tried to use gift cards after expiration and were refused.

Even Hein, the lobbyist, conceded that expiring gift cards could lead to “frustration and anger,” but he noted that many times businesses would honor an expired gift card to please a customer.

Huff said he could agree to lowering the fine and reducing the proposal that would allow cash exchanges. He said he was trying to make it so that if a person had a $50 card and made a $40 purchase, that person could get the leftover back in cash.