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In a June 30, 2009 article in the Wall Street Journal, Erica Alini reported on the extent to which unredeemed gift card balances are being confiscated by many state governments across the country.

Consider the following statements and information from her article:

1. Each year Americans spend about $65 billion in gift cards -- excluding bank-issued prepaid cards -- but don't redeem $6.8 billion, according to research by TowerGroup, a financial-consulting firm.

2. The State of New York, which faces a $7.4 billion budget deficit, collected $9.6 million in unredeemed gift cards last year, according to data provided by the New York State comptroller. New York collects the entire leftover credit on gift cards after 5 years. This is the entire face value for gift cards redeemable in merchandise only and, for all other retail gift cards, the leftover amount.

3. When the owner is unknown, "there's nothing much we can do," said Ron Schubin, director of reporting operations for the New York state comptroller. New York returned to their rightful owners around $2,150 in unredeemed gift cards last year.

Draw your own conclusions, but this seems like a pretty shady deal to me.

- Ed Smith, Publisher
The EHS Letter Manual