MD Rahman

SEN. RAHMAN JOINS SENATE PASSAGE OF BILL PROVIDING CASH REFUNDS FOR GIFT CARD BALANCES UP TO FIVE DOLLARS

HARTFORD – Today, State Senator MD Rahman (D-Manchester) joined the state Senate passage of a bill that will increase the amount of cash that consumers can get back on their unused gift cards from three dollars to five dollars – thereby making Connecticut one of the most generous states in the nation when it comes to gift card protections.

Senate Bill 1018, “AN ACT CONCERNING CASH REFUNDS FOR GIFT CARD BALANCES,” passed the Senate on an overwhelmingly bipartisan 32-3 vote and now heads to the House of Representatives for consideration.

If SB 1018 is approved by the House and signed into law by Governor Ned Lamont, Connecticut would join just six other states – Colorado, Maine, Montana, New Jersey, Oregon, Washington and Puerto Rico– in offering consumers up to five dollars cash back on their unused gift cards. California offers up to $10 cash back, and Massachusetts offers cash back on any balance after 90% of the value of the gift card has been spent.

“Gift cards are great gifts – until you buy an item worth $21.50 with a $25 gift card,” said Sen. Rahman. “That’s money that’s bought and paid for that companies and corporations get to keep, and over the years, it’s added up to billions of dollars. With this legislation, consumers will be able to get more of their money back, and Connecticut joins a growing national trend.”

Not only would SB 1018 increase the cash back value on unused gift cards to five dollars, but consumers would not have to provide a proof of purchase receipt for the gift card, which some retailers demand.

Today’s Senate action comes at a time when American consumers are drowning in unspent gift cards. According to a February 2023 report from Credit Summit, an online provider of financial advisory services, Americans have amassed $21 billion in unspent gift cards. A separate study on gift card usage found the average amount on unused gift cards in 2022 was $175 per person, up from $116 in 2021.

Millennials and GenZ (ages 18-41) have amassed the most unused gift cards, with about 50% reporting they have unused gift cards laying around, with unused balances ranging from $150 to $225. Only 40% of older Americans (GenX and Boomers, ages 42-76) report having unused gift cards on-hand, with balances ranging from $130 to$180.

Connecticut remains one of the most consumer-friendly states in America when it comes to gift cards. Not only does Connecticut allow consumers to get cash back on unused balances, Connecticut is also one of the few states in America that prevents retailers from instituting fees on gift card balances – 33 other states allow such fees. And 29 other states allow their governments to take all or a portion of unspent gift card balances, usually after three to five years of inactivity; Connecticut does not.