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Study on Gift Cards as Unclaimed Property

CH Study  GFState Governments Collect Gift Cards as Unclaimed Property
This study focused on the top 10 largest states in the U.S. in terms of population

Below you will find the CardHub.com study that evaluates the policies in the 10 largest states on claiming unused gift cards as unclaimed property. The study identified an opportunity for consumers to reclaim the full value of their expired gift cards, but also discovered a major pitfall for consumers who try to use unexpired gift cards that have already been claimed by the state.

All of the states in the study that collect gift cards as unclaimed property allow consumers to claim their gift cards even after they have expired. This is good news for consumers who think they have lost money in a gift card that they didn’t use before the expiration date. On the other hand, all of the states that collect gift cards as unclaimed property, with the exception of Pennsylvania, also collect unexpired gift cards. The collection of unexpired gift cards forces consumers into an onerous claims process for a card that they should have been able to easily use. The study revealed that the gift card number is generally not enough to claim a card, and the person claiming the card may need information such as the credit card number used to buy the gift card or a signed affidavit from the person who bought it in order to claim.

Due to certain states’ policies on the collection of unexpired gift cards, it is our recommendation that consumers either use their gift cards quickly or list them on a gift card exchange.

Study Findings by State:

New York

  • State collects gift cards 5 years after the date the card was last used (or 5 years after purchase if card was never used)
  • State collects both expired and unexpired gift cards
  • State collects gift cards without expiration dates
  • State collects gift cards before they expire if there has been 5 years of inactivity on the card
  • The information a consumer needs to claim a gift card from Unclaimed Property depends on how the account was reported when the merchant turned it over to the state
    • If the account owner has been identified, the claimant needs to prove that he or she is the owner
    • If the account owner is unknown, the claimant needs to complete a Claimant Information Affidavit signed both by the claimant and the company which reported the funds to NYS, indicating that the claimant is the rightful owner
  • In order for a merchant to reclaim a gift card that they turned over to Unclaimed property, the merchant would need to provide proof the consumer was reimbursed and a completed Holder Reimbursement Form
  • If contact information is available, the merchant must send due diligence letters to the owner’s last known address 90 days before reporting the account to the state – if the card is valued at over $1,000 and there has been no response to the first letter, a follow up letter must be sent by certified mail 60 days before the account is reported
  • No fees are assessed once the gift card has been turned over to the state
  • How does the consumer know to go to Unclaimed Property to claim the value of their gift card?
    • “The Comptroller has been actively trying to help the public learn how to better manage their financial matters, including gift cards, through public forums and his Your Money New York website. A consumer who wants find out if New York State is holding any funds for him or her, including gift cards, may check on the New York Unclaimed Funds website or call the Office of Unclaimed funds toll-free at 1-800-221-9311. If a consumer finds out from a store that his or her funds have been reported to New York State, he or she can ask the store for specific details about that report. Providing this information to the Office of Unclaimed Funds when making a claim will help them return the consumer’s funds more quickly.”

Texas

  • State collects gift cards on expiration date or 3 years after date of last use – whichever is sooner
  • State only collects gift cards that will eventually expire, but will collect them before their expiration date
  • In order to claim a gift card from Unclaimed Property, a consumer needs whatever information was reported when the merchant turned the gift card over to the state
    • The consumer must submit the card with the claim form
    • OR, if the issuer of the card reported an address to the state for the consumer, then the consumer could show proof of having lived at that address to make a claim
  • The information a merchant needs to reclaim a gift card that they turned over to Unclaimed Property depends on what they originally reported when they turned the gift card over to the state
    • If the merchant only reported the gift card number, they can prove that the gift card number was honored
    • The merchant has to complete a reimbursement form that is on the Unclaimed Property website and send the completed form with documentation of having honored the card (such as a register receipt showing the card number’s use)
  • A due diligence letter must be mailed to the owner by August 1 on properties over $250 informing the owner that the unclaimed property will be turned over to the state in November
  • No fees are assessed once the gift card has been turned over to the state
  • How does the consumer know to go to Unclaimed Property to claim the value of their gift card?
    • The merchant would direct them to Unclaimed Property, or honor the card and go through the reimbursement process

Pennsylvania

  • State collects gift cards 2 years after expiration date, or 5 years after date of issuance if the card has post-sale fees but no expiration date
  • Only state in the study to only collect gift cards after they expire
  • The information a consumer needs to claim a gift card from Unclaimed Property depends on how the account was reported when the merchant turned it over to the state
    • If the company reported a name and address on the account, and that person is not in possession of the original property, then they allow them to sign an Affidavit and Indemnification Agreement
    • If the name of the owner is unknown, then would ask the claimant to provide the original property, whatever the property may be. In most instances, when unknown accounts are reported, there are account numbers or other identifying numbers to match back to the original property
  • No fees are assessed once the gift card has been turned over to the state

Georgia

  • State collects gift cards 5 years after the date the card was last used (or 5 years after purchase if card was never used)
  • State collects both expired and unexpired gift cards
  • State collects gift cards without expiration dates
  • State collects gift cards before they expire if there has been 5 years of inactivity on the card
  • The information a consumer needs to claim a gift card from Unclaimed Property depends on how the account was reported when the merchant turned it over to the state
    • If only the gift card number was reported, that’s all the consumer would need to claim
    • If a name was reported, only the person with that name can claim
  • The information a merchant needs to reclaim a gift card that they turned over to Unclaimed Property depends on what they originally reported when they turned the gift card over to the state – could be a name or even a Social Security Number
  • A due diligence requirement for property of $50 or more requires that the merchant send a first class letter to last known address of card holder before they turn the property over to the state
  • No fees are assessed once the gift card has been turned over to the state
  • How does the consumer know to go to Unclaimed Property to claim the value of their gift card?
    • Merchant may advise customer; the gift card will be listed on the Unclaimed Property website if owner name was provided to the state

North Carolina

  • State collects gift cards 3 years after last use – only collects 60 % of the cards value, the other 40% remains with merchant
  • State only collects gift cards that will eventually expire, but will collect them before their expiration date if there has been 3 years of inactivity on the card
  • The information a consumer needs to claim a gift card from Unclaimed Property depends on how the account was reported when the merchant turned it over to the state
    • If the merchant reported an address with the gift card, a claimant would have to provide proof of the reported address
    • If the merchant only reported the gift card number, the claimant would have to provide the gift card as proof
  • In order for a merchant to reclaim a gift card that they turned over to Unclaimed property, the merchant would have to provide proof that gift card number XXXXX was redeemed for $X – the merchant would also have to complete a Holder Refund Request form that can be found on the North Carolina Unclaimed Property website
  • In accordance with NCGS 116B-59, a merchant should attempt to contact the owner prior to reporting the funds if the owner is known and the merchant has an address of the owner – due to the nature of gift cards, the owner is often unknown
  • No fees are assessed once the gift card has been turned over to the state
  • How does the consumer know to go to Unclaimed Property to claim the value of their gift card?
    • In most cases, the merchant should be familiar with the reporting of unclaimed property and how to advise their customers

Illinois

  • State collects gift cards 5 years after the date the card was last used (or 5 years after purchase if card was never used)
  • State only collects gift cards that will eventually expire, but will collect them before their expiration date if there has been 5 years of inactivity on the card
  • In order for a consumer to claim a gift card they need a Serial Number if the owner is unknown – and a copy of the gift card if at all possible
  • In order for a merchant to reclaim a gift card that they turned over to Unclaimed property, they need to fill out a Holder Refund Request Form – need to tell the state which previous report filed contained that particular gift card balance – would need to provide the unused balance, owner’s name or the gift card number, depending on what identifying information they reported.
  • Merchants holding any unclaimed asset are required to perform due diligence and notify owners of abandoned accounts that will be remitted to the State of Illinois if they do not contact the merchant by a date specified in the letter – cannot contact if no contact info given
  • No fees are assessed once the gift card has been turned over to the state – with limited exceptions, it is inconsistent with Illinois law to assess any fees on gift cards
  • How does the consumer know to go to Unclaimed Property to claim the value of their gift card?
    • If a merchant’s records showed the gift card balance was sent to the State of Illinois, generally the merchant simply refers their customer to the Treasurer’s Office. Gift card balances are just a small part of unclaimed property liability required to be remitted to the Treasurer’s Office so any major retailer’s management should be familiar with unclaimed property.

California

  • Does not collect gift cards as unclaimed property

Ohio

  • Does not collect gift cards as unclaimed property

Michigan

  • Does not collect gift cards as unclaimed property

Florida

  • Does not collect gift cards as unclaimed property

For more information on this study please contact our Media Department.

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