Cards or CashFollow

Law allows Maine share of unused gift cards
Some issuing corporations try to avoid paying state percentage

Maine is attempting to claim 60% of unused gift card monies under the unclaimed property laws. The retail associations will be fighting this as being unconstitutional.



So, what do you think?

Should the retailer get to keep unused gift card cash or at some point should the gov intervene on our behalf to secure the money and hold it in reserve until a claim is made on it?

What about gift cards in general. Do you buy them for gifts? Get them for gifts? Use them?

I know I've lost a couple over the years, but mostly I use mine up. I buy them very infrequently. I really need to be at a loss for an obliged gift before I resort to a gift card.





Edited, Jan 2nd 2008 7:09pm by Elinda

(with interest)

I like the idea that if the money isn't "claimed/used" within about 2 years it gets turned over to a fund for schools. I don't think these big corporations should be able to keep this money.

i would be for this 100%.

i so hate the way business now use gift cards. you can no longer redeem them for cash on the balance. to me that is a rip off. you either waist money or end up spending more money then the card is worth.

i refuse to buy gift cards any longer for friends or family as a result of this.

I buy lottery tickets or scratch offs to give instead of cash or gift cards. But if I buy a lottery ticket as a gift, I'll always get a duplicate ticket so I don't slap myself if that ticket actually is the winner.

So someone buys a gift card for someone else and if that person doesn't use it, the government wants it?

Why?

The original buyer has no need for it anymore, after all he gave it away. And if the recipient of the gift has no need for it, why shouldn't the company keep it all?

Sure! $97 billion really isnt that much. Lets say 10% of that amount is never redeemed. The state gets 60% for the unclaimed assets thing, right? 5billion is still a nice chunk of change.


Katie r tard.

Edited, Jan 2nd 2008 6:15pm by Katie

Ah, sorry. The link would help.

Whoever put that out there threw some erroneous information into the mix. Revenue is received and recorded at the time of the gift card sale and a liability for the amount of the gift card (or certificate) is placed on the books. While this may vary from state to state (for sales tax), companies keeping untaxed money in B2C transactions is rather rare.

These companies are frequently holding these outstanding balances for years at a time and while the costs of having these outstanding liabilities are fractions of the costs of the actual liability, consideration still must be made.

What would you do if you wrote a check for a relative's birthday then every month, you check your statement and see that it hasn't been cashed? You remind them (the analog being advertisements) but still two years later they haven't cashed it. The government doesn't just come and tell you that they're taking your unclaimed money. That cash remains yours.

Obviously there is a demand for gift cards or they wouldn't be a billion dollar question every holiday season. Before you buy them for anyone make sure you know and are comfortable with the terms (especially restrictions on redemption) or give someone cash.

Southern Maine is a hotbed for gift-buying.

Right, because that drive to Portsmouth where this is zero sales tax is just too onerous.

Can't say for certain whether it's unconstitutional, but it's definitely "wrong" in my book. Regardless of how many are purchased and how much isn't used or whatnot, I'm at a loss to see how the state thinks that any of this magically becomes their property at any point.


By that logic, if I buy a Wok and never use it, does the state get to take it away from me at some point? No. It's my property. Period. If I purchase a gift card and don't use it, that's my choice. If that means that the retail outlet received money for goods that they didn't have to hand out to anyone, that's their benefit. The fact that no one used the item that was "purchased" is irrelevant. No matter how you slice it, the property either belongs to the buyer, or the seller.

Now, I can see a tax issue. But that's not really relevant either. The taxes are paid on the purchase of the card alone, but it's not sale's tax. The revenue shows up as a profit for the store and is taxed normally. When the card is redeemed, that shows up as a sale and the sales tax is paid at that point. So the state is technically missing that revenue, but that's nowhere near 60% and isn't fair to collect anyway. Sales tax is a tax on goods obtained by consumers. if the card isn't redeemed, then no goods were consumed, and the state shouldn't receive any sales tax.

Certainly, nothing about any of this justifies taking 60% of the value of the cards. That's pretty much highway robbery IMO.

I think they did that in California like 15 years ago. I'd assumed it was the same everywhere.


Fine. If they allow cards to expire, then at the time of expiration, have the store pay the state the sales tax on the value of the card (just as they would have had a sale been made). That's "fair" to the state (since it's what they would have gotten if the card had been used).

But 60%? I just don't buy the idea that the state can and should take money from a business just because the business has the money to take. Which is effectively what this is.

But it doesn't sound as if they just passed a "***** the retail stores" law but are rather using existing laws to claim their due.

I dunno. Maine politics is a total crap shoot. It largely comes down to who has the strongest lobster to put forth as a champion in "Neptune's Tournament"