The HS Dent Financial Blog

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Yes, the States Really are THAT Petty

In what might be the most shameless grab for revenue by any level of government, many states are now renewing a push to claim unused gift cards as “abondoned property.”   As the Wall Street Journal reports, “Since the recession began, states have been aggressively tapping so-called abandoned property — anything from gift cards to dormant bank accounts and safety-deposit boxes. About half the states collect unused gift cards after a period of two to five years.” (Link to article: “Governments Grab Unused Gift Cards.”)

Many companies book unused giftcards as income  as a certain amount of time has passed, assuming that the cards will never be used.   Home Depot, for example, reported $37 million in revenue from unclaimed cards in the past year, and American Eagle Outfitters collected more than $12 million.  Why the states would think they were entitled to this money is beyond me.  I suppose desperate times call for desperate measures.  And given the horrid condition of state finances — California for one is now officially paying its bills with IOUs — actions like this are only the beginning.

Charles Sizemore, CFA

Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy