End gift-card ripoffs.

Byline: The Register-Guard

People buy gift cards so that friends or relatives celebrating birthdays, graduations or holidays can choose their own presents at their favorite stores. Too often, however, the real recipients of the gifts are the retailers. The Oregon House of Representatives has unanimously approved a bill banning the worst gift-card rip-offs; the Senate should do the same.

Gift cards are already a great deal for retailers. The buyer gives the retailer cash today in exchange for a piece of plastic redeemable for products or services in the future. It amounts to an interest-free loan. As much as 10 percent of cards' value is never redeemed, which translates to pure profit for the seller.

That good deal is still not good enough for some gift card issuers. In some cases, a set-up fee, a monthly service charge or both are deducted from the value of the card, so that when it's used the card is worth less than its face value. In other cases, the cards expire unless they're used by a certain date - in which case the buyers have made a gift, not just a loan, to the retailer.

House Bill 2513 would prohibit gift card expirations or fees that drain the value of the cards over time. With Oregonians spending an estimated $1 billion a year on gift cards, HB 2513 would be a significant piece of consumer protection legislation.

Sen. Ben Westlund, D-Bend, has a proposal that does all that HB 2513 would do, and then takes a giant step backward: Any gift cards unredeemed after three years would be declared unclaimed property, and their value would be credited to the Common School Fund. Westlund's proposal, Senate Bill 460, would enrich the school fund by an estimated $42 million to $96 million a year.

Under SB 460, the state would shoulder retailers aside as the beneficiary of the worst gift-card practice - cards would, in effect, expire after three years, and the state would get the money. In theory, a person who had a gift card more than three years old could obtain payment for its face value from the Common School Fund. In practice, hardly anyone would do that.

HB 2513 would end gift-card rip-offs. SB 460 would let the state take over the racket. The Senate should accept the House's version rather than making a grab for unredeemed gift cards. And Oregonians who wish to give a gift without buying a present that might be the wrong size or color should consider one that's redeemable anywhere, isn't subject to fees and never expires: cash.