The popularity of retail, restaurant and service-oriented gift cards is a testament to a consumer culture driven by convenience. Short on time and patience, buyers decide they’d rather let friends and loved ones take the trouble to shop.
Only sometimes, gift card recipients are themselves too short on time and patience to cash in their presents. According to Nevada Assemblyman Ruben Kihuen, D-Las Vegas, of $80 billion worth of gift cards purchased nationwide last year, some $8 billion went unredeemed.
The prospect of so much money remaining in the private-sector economy, supporting the jobs and reinvestment that contribute to a vibrant tax base, is apparently troubling to Mr. Kihuen. So like lawmakers in a handful of other states, he has proposed making all gift cards the de facto property of the government.
Assembly Bill 279, sponsored by Mr. Kihuen and already passed by the lower house, received unanimous approval Friday from the Senate Judiciary Committee. That panel amended the bill to mandate that the issuers of expired, unused gift cards would get to keep 40 percent of the purchase amount. The rest would go to the state.
This legislation is instructive in showing how desperate lawmakers are for additional spending money. Nevada’s general fund will grow by 15 percent in the coming two fiscal years — representing about $1 billion in new spending — and legislators are still scheming to pick citizens’ pockets of after-tax dollars.
The bill is so experimental that no one in Carson City can say with certainty how much money it might bring in. In Texas, a state with roughly 10 times the population of Nevada, lawmakers believe their gift-card grab might yield $20 million in 2009. So the Nevada Legislature is prepared to establish another regulatory structure that burdens businesses with additional record-keeping — for what, $2 million per year, tops?
The state has no right to claim a majority stake in cash transactions between consenting parties simply because one party decides not to redeem a gift card before an expiration date. If lawmakers were passing this bill under the guise of consumer protection, they might simply encourage the public to buy only gift cards that do not have an expiration date.
But this bill isn’t about consumer protection. It’s a money grab, pure and simple.
The Republican-controlled Senate should ignore Assembly Bill 279. If its members can’t resist, then Gov. Jim Gibbons should veto it.