Government Takes What’s Yours (What else is new?)

Gift cards.  Ever get one for a gift?  Ever give them out as one?  You might want to start changing your mind on what you do with them and how you use them, whether you get one or give one.

Why?

Simple, because states that are confronted with ever sinking tax collections and a rising mountain of debt are going after any additional revenue that they can find, and what they have found is unused gift cards.

Numerous states are looking to put forth legislation that will give them the right to go after and collect gift cards that remain unclaimed or unused, even those that have no expiration date.  Many states already take the funds from cards that currently have an expiration date.

For many years, states have been looking under every rock that they can find to help slow the revenue withdrawal symptoms they are experiencing because of the recession.  What they have found are the county and state coffers of unclaimed funds and a way to use them, especially unused, untapped gift cards.

Americans spend every year $65 billion in gift cards.  This does not include prepaid cards by banks.  Every year Americans throw away $6.8 billion by not redeeming them, according to research done by TowerGroup, a financial consulting firm.

The New York Times estimated $3.5 billion in gift cards went unclaimed during last year's holiday season alone.

Consumer Reports completed a study where the group found that 62 percent of consumers are planning to buy gift cards. The survey continued, 27 percent who received a gift card never used them due to numerous reasons that included not having the time to use them.  Other top reasons were that they could not find anything that they wanted and the majority of the balance was that they completely forgot about the cards.

The National Retail Federation said retailers have opposed efforts to extend states’ reach into unredeemed gift cards.

According to the Securities and Exchange Commission filings, Home Depot Inc. reported $37 million in revenue from unused gift-card credit in 2009.

Best Buy recently had revenue in the amount of around $19 million in unused cards. Because of basing its gift card operation center in Virginia, the unclaimed balances are able to go straight to Best Buy's bottom line.

As states target these dollars, companies are moving and separating their gift card operations to friendlier states that won’t go after these dollars.

It won’t be long before states go after the unclaimed funds so that they have use of that money to help balance their budget. 

The key word is help, not balance. 

Their spending is too far-gone to ever get any kind of balance.