Those often overlooked surcharges on gift card purchases may soon be a thing of the past in Rhode Island.
Last month, State Sen. Christopher Maselli, D-Dist. 25, introduced a bill banning surcharges on all gift cards, gift certificates and pre-paid long distance calling cards issued in the state.
If approved, the bill will expand a law passed a few years ago that prohibits expiration dates and maintenance fees on gift cards but does not exclude the addition of surcharges on them.
Maselli said some stores have added a $2 or $2.50 surcharge to their gift cards to get around the law. "I certainly don't think that's fair to the consumer," Maselli said. "It's just a matter of greed on the part of the retailer."
Maselli introduced the bill last year, but the Senate did not approve it.
During the holiday season, many consumers spend more than normal on gift cards, Maselli said.
"They may spend an extra 10, 12 or 14 dollars that they could spend on lunch or maybe another gift card," he said. "It adds up."
About 30 to 60 percent of gift cards are never redeemed, said Rhode Island House Rep. Stephen Ucci, D-Dist. 42, who has introduced the same bill in the state House.
Ucci said there is "no rationale behind the fee" since retailers already make extra money from the unused gift cards.
The bill passed in the House last year, and Ucci said he thinks it will pass this year as well.
Though Maselli and Ucci said the bill is consumer-friendly, others think it might end up harming shoppers.
"Businesses are not just going to eat the cost of this legislation," said Justin Katz, who writes a conservative blog on Rhode Island politics called Anchor Rising. "They will pass on the cost to all consumers."
Katz, who criticized the bill in his blog, said such bills drive businesses out of the state.
"Rhode Island is driving out people with money year in and year out," he said. "In the past two years, half a billion dollars of taxable income has left the state."
Katz said a surcharge is the price customers pay for convenience and that a bill banning it reflects the "totalitarian mindset" of the legislators.
"I hope it doesn't pass this year again," he added.
But Ucci said it is "ludicrous" to think the legislation will force businesses to leave the state.
"That's crying wolf," he said. "If you see who is charging a surcharge - it's Providence Place Mall. It's not going to close."
Ucci said the law will have a "negligible impact" on stores like CVS Pharmacy, which offers gift cards, because the stores do not rely on them for profit.
Some Thayer Street store owners said they support the bill.
Ann Dusseault, owner of Pie in the Sky, a novelty and gift shop, said she does not charge surcharges on her gift certificates.
"As a consumer myself, I'm in favor of the bill," she said.
Instead of charging a surcharge, Spectrum India, a boutique, offers a 10-percent discount on gift certificates worth $100, said owner Jagdish Sachdev.
Sachdev said he is "absolutely" against surcharges, as they discourage customers from buying gift certificates.
