New MICHIGAN Gift Card Law Takes Effect November 01, 2008

LANSING, Mich. -- Starting November 01, 2008, you will have at least five years to use the next gift card or gift certificate you get for a birthday or holiday in Michigan. You also won't have to worry about inactivity fees that reduce a card's value if it's not used within a specific amount of time. The law that takes effect Nov. 1 doesn't apply to existing cards and certificates in your wallet or purse.

Gov. Jennifer Granholm signed the restrictions months ago after state lawmakers became annoyed that some gift certificates were expiring in one year. Rep. Fred Miller, a sponsor of the legislation, couldn't make it to the Upper Peninsula in time to spend a $100 wedding gift certificate at a hotel. "Basically our friend's very thoughtful and well-intentioned gift was for naught," the Mount Clemens Democrat said. "It's important consumers have these protections and transparency so that people are getting their money's worth." Sen. Nancy Cassis, another bill sponsor and a Novi Republican, came across gift certificates for a spa, salon and restaurants in her desk drawer one day. They had expired after one year. "One year was too short a period of time to spend what I considered as good as money," Cassis said. The law that takes effect in time for the holiday shopping season is "pro-consumer," she said. "Anyone can put away a gift card and not think about it." Michigan isn't alone when it comes to regulating gift cards. At least 24 other states have specific limitations on how long cards must last, according to the National Conference of State Legislatures.

Nine other states require expiration dates to be listed, sometimes on the cards themselves. Regulations have been added to gift cards as their sales have ballooned over the years. Though there may be some drop-off this year because of the weakening economy, gift cards still will approach a $100 billion industry in 2008, according to TowerGroup, a research firm based in Needham, Mass. Just because they're popular gifts, however, doesn't mean gift cards are always used. "They tend to get put into drawers," said Brian Riley, a research director at TowerGroup. "More than two-thirds don't get used within the first 30 days. People have them there and forget them." Besides giving people at least five years to redeem long-forgotten gift cards and certificates, the new law also requires stores to disclose all terms and conditions to prospective buyers. Those terms can't be changed after the fact, either.

Different Michigan retailers have had different policies. Some stores' gift cards expire after 12 months or more. Some cards start depreciating by $2 a month if they aren't used after 13 months. When the customer uses the card, the dormancy fee stops until there's another 13 months of inactivity. Gift cards are seen as a quick and easy solution to holiday gift-giving dilemmas. In some cases, however, the card holder may leave a perpetual balance on the card by making a purchase that costs less than the card's value.

MY NOTE: Did you know that only 30% of ALL GIFT CARDS sold in the USA, Actually get used. The rest of them the Merchant makes a big profit off them. As people buy them and then forget about them. In my dad's case, he is so cheap on buying people gifts, That he will actually take YOUR gift card that you give him and "Re-Gift" it to someone else. I bought him a $200.00 Nativity scene for xmas, I would put it up every year and he asked me one year what the value of the item was? I told him and also told him if he didn't want it any more I would like it when I move out. He donated my gift for a $200 tax write off. I no longer buy him gifts, what I do is I'll take him out to a Restaurant and pay for his meal and thats all. Because I can't trust him to give away my gift to someone else when I spend my time and energy going to the store, buying him the perfect gift and then give it away as it as no meaning to him or value. I also teach him a lesson by opening up his gifts so he can't Re-Gift them, LMAO!

<---Our state started that law two or three years ago; NO time limit.