Legislature(2007 - 2008)BELTZ 211
04/12/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB115 | |
| HB34 | |
| SB117 | |
| Affordable Housing Issues | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 117 | ||
| = | SB 124 | ||
| = | SB 115 | ||
| = | HB 34 | ||
SB 115-GIFT CARDS
1:33:51 PM
CHAIR ELLIS announced CSSB 115(STA) to be up for consideration.
1:34:14 PM
SENATOR BUNDE joined the committee.
1:34:21 PM
MARIT CARLSON VAN-DORT, staff to Senator McGuire, sponsor of SB
115, said there had been no changes to the bill and that the
chair requested a letter of support from AKPIRG that she had
distributed to the committee.
CHAIR ELLIS mentioned that some folks from out of state might
have some concerns and asked if she knew about them.
MS. VAN-DORT replied that she had several conversations this
morning with Mr. Glen Peterson, District Manager for Carrs
Safeway/Alaska who expressed concerns raised by corporate
attorneys about Section 1 relating to unclaimed property. It was
his intention to have one of the attorneys testify.
1:36:15 PM
CHAIR ELLIS noted that no one was on line to testify and so he
set SB 115 aside until a testifier could arrive.
SB 115-GIFT CARDS
2:11:57 PM
CHAIR ELLIS announced CSSB 115(STA) to be back before the
committee.
DAVID DURRANT, Blackhawk Network and Carrs/Safeway, said he
appreciated the need for consumer protection in this area and
the efforts to bring greater clarity to the law in Alaska,
especially for the amount presumed to be abandoned on gift
cards. He was concerned, however, on behalf of issuers of closed
loop distributors, such as retailers like Carrs/Safeway and
Blackhawk, because there is a capacity for them to escheat funds
to the state. He explained:
For example, a $100 card on which $50 is used, three
years later the issuer would have to escheat $50 to
the state, but because of the new provision that says
the cards would need to be evergreened - that is to
say that the issuer would have to make good on the
sole face value of that card whenever the customer
comes back in - be it 5 years from now or 100 - that
the retailer could, in essence, have to escheat $50 to
the state and still then have to make good on an
additional $50 to the consumer - in essence paying
double - and then having to come back to the state at
some future date for some sort of a refund or rebate.
We would ask that the bill be amended to match the
laws of states like Washington, Oregon, Arizona,
California, that exempt these evergreened closed-loop
cards from abandonment simply because the retailer,
the issuer, remains in that relationship with the
consumers, so long as that card is still capable of
being redeemed.
Alternatively, if one could make it such that bill
exempted those - I'm sorry - that the three-year
provision only applied to those cards that were
exempted from the evergreen provision, I think that
would have the same net effect of still protecting
consumers and the retailers who choose to issue gift
cards in the state of Alaska.
2:14:47 PM
SENATOR STEVENS asked how many cards are normally redeemed.
MR. DURRANT replied that 50 percent of gift cards are redeemed
within the first 30 days after purchase. Ultimately, after three
years 5 - 8 percent go unredeemed. He didn't know the percentage
of those that would never be redeemed.
2:15:34 PM
MARIT CARLSON VAN-DORT, staff to Senator McGuire, responded that
this statute is being barely amended and has been on the books
since 1986. She thought it interesting that they were taking
issue with this section of the statute now. Secondly, she would
oppose the amendment, because it would effectively gut the bill
- since it extends the value of the gift cards in perpetuity.
Third, she wondered what the effect would really be on
businesses if only about 5 - 8 percent of gift cards are not
redeemed after 3 years.
2:16:41 PM
SENATOR BUNDE asked if a card can be kept alive in perpetuity,
why should lawmakers require a company to declare it as
unclaimed property.
MS. VAN-DORT replied that this provision provides additional
consumer protection for those people who have purchased gift
cards in case the business folds. They can go to the state to
get their money. In terms of paying double, business owners have
recourse as well. They can effectively get their money back if
they choose to honor a gift card that has already been reported
as unclaimed property.
2:18:14 PM
SENATOR BUNDE said he understood where this was going and asked
if an added cost would be passed on to the consumer.
2:19:32 PM
SENATOR STEVENS commented that forever is a long time and asked
if the value could be capped at a certain point so the books
don't need to be kept for the next 100 years.
MS. VAN-DORT replied the sponsor would be open to something like
that, but she noted that all Carrs/Safeway gift cards are
without expiration dates anyway. People like that.
2:20:33 PM
SENATOR STEVENS asked how hard it is for a business to get its
money back from the state.
RACHAEL LEWIS, Administrator of Unclaimed Properties, Department
of Revenue, replied that the Unclaimed Property Act has a
section specifically addressing holder reimbursements. A holder
is any company that is holding unclaimed property and has turned
it over to the State of Alaska for custodial purposes. All
that's needed is either a letter or affidavit. All states have a
standardized form called the "Holder Reimbursement Form" that
says "Yes, we have already made good on this particular item;
please reimburse us for it." And they do that on a regular
basis.
2:22:05 PM
SENATOR BUNDE asked if there is any way to know what a typical
request for reimbursement from a consumer would be for a card
that wasn't honored. He was concerned that a company could get
"nicked" for another $25 or $30 and they couldn't afford to pay
staff to write to her division for that price.
2:22:43 PM
MS. LEWIS replied that a company would not have to honor the
gift certificate even though it has no expiration date; it would
just have to refer a consumer to the state's Division of
Unclaimed Property - it has a website. Most of the companies
honor gift cards out of good will and customer service. However,
she noted that 100 percent of travelers' checks have to be
holder reimbursed. The statute says "promptly reimburse the
holder," so they get priority.
2:25:14 PM
SENATOR STEVENS moved to pass CSSB 115(STA) with individual
recommendations and attached fiscal notes. There were no
objections and it was so ordered.
| Document Name | Date/Time | Subjects |
|---|