STAND. COM. REP. NO. 1532

Honolulu, Hawaii

RE: H.B. No. 314

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred H.B. No. 314, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO GIFT CERTIFICATES,"

begs leave to report as follows:

The purpose and intent of this measure is to require a gift certificate issuer to redeem the remaining value of a gift certificate for cash if the gift certificate has a balance of less than $5.

Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs. Your Committee received testimony in opposition to this measure from the Hawai‘i Restaurant Association, Retail Merchants of Hawaii, and Hawaii Food Industry Association.

Your Committee finds that after a consumer uses a gift card, there may be a small balance remaining that often goes unused or forgotten or is lost upon loss of the gift card. In addition, many consumers may purposefully discard a gift card with a negligible balance because they would not find any value in keeping a gift card with such small purchasing power. This is supported by statistics issued by Consumer Reports, which reported that billions of dollars are left unspent and unredeemed on gift certificates in the United States each year. Your Committee notes that existing law states that balances left on unredeemed gift certificates do not belong to the merchant. Rather, the balances remaining after the expiration date are turned over to the State as unclaimed property. Consequently, requiring merchants to provide the balance as cash to customers does not deprive merchants of anything to which they are entitled and in fact facilitates the disposition of funds that might otherwise have to be turned over to the State as unclaimed property. This measure requires a gift certificate issuer to redeem the remaining value of a gift certificate for cash if the gift certificate has a balance of less than $5, thereby helping to ensure that consumers receive the full benefit of a gift certificate.

Your Committee has amended this measure by inserting an effective date of January 1, 2020.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 314, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 314, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,

________________________________

ROSALYN H. BAKER, Chair