As of July 1st, 2011, gift cards are no longer considered unclaimed property by the state of Utah. This change was a result of Senate Bill 270 and was actually passed into law on March 25, 2009. Utah Senator Wayne Niederhauser and House Representative Rebecca Lockhart sponsored S.B. 270. Cheers to them for helping modernize Utah's Gift Card Laws.
Why This Is A Good Thing
Considering gift cards as unclaimed property is a bad idea and it's great to see Utah confirming such a belief. There is one predominant factor to consider when deciding whether or not a gift card should be considered unclaimed property: true ownership of the property.
The fact is, the true owner of a gift card is typically unknown by the company who sold the gift card and the state were the gift card was issued. That's problematic because a state's right to seize unclaimed property often requires the property to be within the state's borders in some way.
The true owner of the gift card is typically an unknown because most consumers buy gift cards to give as a gift to another person. Such a person might live in another state or they could move to another state before redeeming their gift card. The bottom line is there is not a simple, effective and accurate way to determine where the person who owns the gift card actually lives.
Using A Butcher's Knife Instead Of A Surgeon's Scalpel
Unfortunately, states which still consider gift cards as unclaimed property often use rather crude ways for determining which gift cards should be turned over as unclaimed property. For example, Nevada Gift Card Law states:
"If a gift certificate is issued or sold in this State and the seller or issuer does not obtain and maintain in his or her records the name and address of the owner of the gift certificate, the address of the owner of the gift certificate shall be deemed to be the address of the Office of the State Treasurer in Carson City."
First off, it's not very reasonable to expect a merchant to know who the gift card was given to at all times. I understand there are merchants who offer the ability to register gift cards, but the vast majority of gift cards are single use and never registered by it's rightful owner.
Second, the net effect of this law results in most gift cards sold in Nevada being deemed to be held by the State Treasurer in Carson City. It's obvious no gift cards will actually be owned by a person at that address and I can tell you first hand I've sent gift cards out of the state which it was originally purchased. This is the butcher's knife, but they need a scalpel if they want to accurately seize unclaimed property.
In The End, It's The State's Budget Who Benefits
One could argue a consumer could search unclaimed property and get the a check for the gift card's value which was turned over to the state; however, the reality is most consumers are unlikely to search for the property and it's even possible a state which they do not live in currently holds the property.
State legislators who want to consider gift cards as unclaimed property are focused more on gaining "free money" for their budget and less on protecting consumers and making the gift card industry more consumer friendly.
It's time to see more state's follow the path of Utah. The simple and fair thing to do here is exclude gift cards from unclaimed property laws.