Sen. Vincent J. Fumo

District Office

1208 Tasker Street
Phila, PA 19148

Harrisburg Office

545 Main Capitol
Hbg, PA 17120



_____________________NEWS RELEASE
State Senator

1st Senatorial District
Democratic Appropriations Committee Chairman
Room 545 Main Capitol, Harrisburg PA 17120
Internet Website:

PHONE: 717-787-5662 


     HARRISBURG, April 21, 2004 – State Senator Vince Fumo (D-Philadelphia) has introduced a bill that would guarantee Pennsylvania consumers the right to obtain the full value of gift certificates, even if they are not redeemed for several years.

     The legislation (SB 1098) is intended to clarify the confusing state law regarding the issuance, use, expiration and reversion of gift certificates in the state. The bill has 19 co-sponsors in addition to Fumo.

     Americans spend an estimated $45 billion annually on gift certificates and gift cards. Of that, about $5 billion eventually goes unused. While the unused money belongs to consumers, current state law is not clear enough to make sure that they actually receive it. It is often retained by the issuer as a "handling fee" or "inactivity fee."

     "This bill will ensure that consumers in Pennsylvania do not lose the money that they have paid for gift certificates," said Fumo. "It would prevent a company from ‘double dipping’ by collecting money for a gift certificate and then assessing fees if the certificate isn’t redeemed for a while."

     Under the bill, if a business chooses to place an expiration date on a gift certificate, it can be no less than two years beyond the date of issuance. Even if it does list an expiration date, however, the business would still be required to redeem the certificate for the full face value through five years.

     After five years, the consumer could recover the value as unclaimed property under state escheat laws.

     A problem with current state law that the bill addresses is the gradual erosion of certificate value through fees. One prominent national retailer, for example, imposes a $1 per month inactivity fee if a certificate is not used for 24 consecutive months. The charge is imposed retroactively. Thus, a $25 gift certificate that is not used for 24 months would be worth just $1 if redeemed at that point. A month later it would be worth $0. This practice would be outlawed under the Fumo legislation.

     "We would apply this provision to all companies selling gift certificates in Pennsylvania, so out-of-state companies would not be able to impose these fees, as some now do," Fumo said.

     The bill would ensure that the unused certificates fall under Pennsylvania law by requiring the sellers to record the address of the eventual recipient, closing a loophole utilized by companies to skirt some states’ laws.