Sen. Richard Blumenthal LAW ’73 introduced the Gift Card Consumer Protection Act Friday in an effort to strengthen current federal regulations of gift card expiration dates and non-use fees.

Under current gift card regulations detailed in the Credit CARD Act of 2009, gift cards can expire after five years of activation and non-use fees can be charged once a month after 12 months of dormancy. Blumenthal hopes to ban expiration deadlines and non-use fees altogether under the proposed act and protect consumers from policies that sap gift card value.

“This bill would expand and enhance the protections beyond what states now guarantee and would also provide a uniform national standard, which is important because many of these companies are national companies,” Blumenthal said in an interview with the News. He added in a statement that gift card companies charge “absolutely draconian deadlines and abusive fees and charges that unfairly confiscate consumer gift card cash.”

The National Retail Federation projects that over 80 percent of shoppers will purchase at least one gift cart this holiday season. In the same survey, 16 percent of consumers said they are less likely to buy gift cards because of concern that the card would expire or have added fees.

David Butler, communications director for Consumers Union, said gift cards could end up being the most popular gift this holiday season.

“While gift cards do offer a simple quick solution for the hardest-to-buy people on your list, they often come with a lot of fine print,” Butler said.

Linda Sherry, director of Consumer Action, a national nonprofit group that advocates for consumer rights, said the gift card policies that individuals are most concerned about are non-use fees.

“To us, gift cards are like cash,” Sherry said. “Your cash shouldn’t just disappear after a certain period of time either through fees or through being sent to an agency that collects unclaimed funds. It puts another hurdle in front of the consumer.”

While gift card policy at a federal level permits certain expiration date and non-use fee policies, some states have chosen to exceed federal jurisdiction. Connecticut, for example, already prohibits these fees. Nonetheless, gift card companies have a workaround to such legislation: Companies may issue their gift cards through a federally charted bank, which cannot be limited by state regulation. The Gift Card Protection Act would eliminate this practice by unifying the ban on gift card expiration dates and fees across all states.

The bill would also force companies that file for bankruptcy to stop selling future gift cards and honor cards that remain unredeemed.

“We’re particularly happy to see what the bill would do in reference to companies that declare bankruptcy,” Butler said. “We think that that’s a long-overdue reform. It sends a message that companies that file for bankruptcy will have to step up to ensure that people with gift cards aren’t shortchanged.”

Finally, the measure proposes to extend federal protection to loyalty, reward and promotional gift cards, which tend to have much shorter expiration dates.

“These cards are promised to have a certain value. In other words, when you use your American Express card and you accumulate miles or points, they should be deemed to have lasting value,” Blumenthal said.

Blumenthal has been working to end gift card expiration deadlines and non-use fees since he was attorney general for Connecticut.

The National Retail Federation predicts that total gift card spending this holiday season will reach $28.79 billion.