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Senate supports gift card protection

ST. PAUL -- Minnesotans wouldn't have to worry about some shelved gift cards losing their value under a bill the Senate gave preliminary approval to Friday.

ST. PAUL -- Minnesotans wouldn't have to worry about some shelved gift cards losing their value under a bill the Senate gave preliminary approval to Friday.

The measure, authored by Sen. Katie Sieben, DFL-Cottage Grove, allows retailer-issued gift cards to retain their value.

As it stands, many businesses place virtual kill switches on the cards, rendering them useless after a certain period of time. Others impose dormancy fees, which reduce the value on the cards the longer they go unused.

Customers "want to get their money's worth," said Sieben, before senators signaled support for the bill with a voice vote.

Businesses imposing gift card limits include Macy's, K mart and Caribou Coffee, she noted.

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But personal responsibility should come into play before the government steps into the private sector, Republicans argued.

Sen. Chris Gerlach, R-Apple Valley, said the bill allows customers "to just get a pass" even though they have an opportunity to learn whether the business imposes gift card expiration dates or dormancy fees.

"I think it's bad public policy for the government to inject itself into the marketplace here," he said.

Sieben's bill doesn't pertain to gift cards issued by federal banks -- a condition she said helped draw support from the business community. She noted that the Minnesota Retailers Association spoke in favor of the bill during a Senate committee hearing.

But since all gift cards wouldn't be covered under the bill, the disparity could lead to confusion for consumers, said Sen. Ray Vandeveer, R-Forest Lake. Republicans also questioned why the bill had arisen, since no complaints of fraud or risks to public safety have arisen.

"I'm not sure we've ever established fraud as the threshold for government regulation," said Sen. Ron Latz, DFL-St. Louis Park.

A provision calling for stores to issue cash returns for gift card balances of less than $5 was scrapped, Sieben noted.

The bill awaits a final Senate vote. Similar legislation is headed to the House floor, Sieben said. Gov. Tim Pawlenty's spokesman didn't immediately return a call seeking comment.

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Mike Longaecker works for Forum Communications Co., which owns the Bemidji Pioneer.

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