A Funny Idea of 'Consumer Protection'

The State of Maine -- and a number of others -- have decided that there's one class of private property that reverts to the state if it is not used within two years. If the class of property were a car, or a home, or a piece of real estate, we would never stand for it. Elected officials would get tossed out of office if they tried to confiscate those. But apparently the states feel that there's at least one sort of property that's different: gift cards.

Maine officials say the issue is consumer rights and some of the billions of dollars in unused gift-card value whose ownership cannot be determined should revert to the public instead of retailers.

“There is a windfall of sizable proportions here that Maine law wants to return to the consumers, and that the national retailers want to hold on to,” said Lemoine, who has sought — without success so far — to get large chains to pay up.

The retail industry says the Maine law is simply a money grab.

“States have no legitimate claim to that money whatsoever,” said Craig Shearman of the National Retail Federation. “This is really a situation where states are seeing revenue shortfalls, and they’re looking for ways to put their hands in somebody else’s pocket to cover their tax situations...”

Nationally, unused value is expected to drop to $7.8 billion this year from $8 billion last year. Most gift cards issued by retailers have no expiration date, and Maine is among the states that prohibits expiration dates on the cards.

Note the attempt at misdirection by the way: if you fail to use a gift card for 2 years, the state considers it a card 'whose ownership cannot be determined.' That's silly of course. The ownership of the balance is no less certain than a card that's been outstanding for a week. In either case, all that anyone can determine with certainty is that it hasn't been used. There's no way to tell who has the card, of course.

It's also ironic that the state of Maine makes it illegal for retailers to put expiration dates on the cards -- since the state is effectively doing exactly that. After two years, the card expires (for the consumer) and the balance is transferred to the state.

Why stop here? Why not seize bank accounts with no activity for two years? Or real estate? Why not set up a program for consumers to give unwanted Christmas gifts to the state? What exactly is the difference?

At what point does the state magically assume some right to step in between gift giver and recipient, and decide that the recipient no longer wants the gift?

I prefer honest taxes.

One more question: how is it that this does not constitute interference with interstate commerce -- a power reserved in the Constitution to the federal government?