Wednesday, December 27, 2006

The Packers and Gift Cards

A couple of quickies to mark my return from break...

First on tap is the decision to move the Packers game against the Bears to Sunday night. Last week Packers fans had to deal with the fact that the game against the Vikings only aired on the NFL Network, and now they need to deal with this. Any other Sunday night wouldn't be an issue, but this Sunday night just happens to be New Years Eve.

And if it wasn't enough that it's a Packers-Bears game and possibly Brett Favre's last appearance on the gridiron, the match potentially takes on added importance if the Pack is still alive in the playoff hunt. A variety of scenarios exist to make that happen, but they almost all require a NY Giants loss this Saturday.

So for those fans who only feel the need to alter their New Years plans if there's a shot at the playoffs at stake on Sunday night, the real game to watch this weekend is the Giants-Redskins on Saturday night, which will tell you whether changing plans is really necessary. Of course, you better find yourself a satellite dish, because that game's only on the NFL Network.

In other news, a Dem state legislator from Milwaukee -- Fred Kessler -- is arguing that the state should get the cash from unused gift cards once they expire. Currently, the value from the gift card just goes back to the company that sold it; so, in effect, the company gets paid twice for it. Kessler notes: "I'd rather have people spend the money and use the gift card, but if they aren't, I'd rather the state get the money."

I'm as much a proponent of improving public finance as anyone, but -- at first glance -- this just doesn't make any sense to me. Why should the state get the money? There's no logic to it.

What does make sense is legislation, which has been rejected in the past, to end gift card expiration dates or at least make them more explicit for consumers. Unless Kessler's goal is to create an extreme that, in turn, makes these other proposals seem more palatable, he should just focus on reintroducing the old legislation.

But even if his advocacy is just a rhetorical tool, it seems misguided. Proposals like these are easy fodder for conservatives to claim that Dems are interested in meddling in the free market for no good reason other than to feed the evil tax machine that is our government.

Public finance needs to be improved, but the means for doing so must be at best systemic and at least logically sound. This idea isn't either.

4 Comments:

Blogger Julie said...

Had Kessler lost his mind? In my opinion, the unused portion should go back to the consumer who originally purchased the card, not the state. But, if not the original purchaser (as in cases of gift cards purchased with cash), the merchant should be allowed to keep the money. However; I would like to see the year expiration removed, but really, if you haven't used the card in a year, you probably aren't going to use it at all.

December 27, 2006  
Blogger grumps said...

If you stretch really, really hard you can make some kind of correlation to the Abandoned Account claim that the state has to inactive bank accounts. The state has to, at least, try to return the value to the account holder.

This proposal would create a bureaucratic nightmare to administer for what are, in the long run, minimal returns. Far better to reform credit and retail laws to mandate that customers know and get what they pay for.

December 27, 2006  
Blogger Ben Brothers said...

I don't understand the proposal, either.

I would guess the theory behind it is that it's best to capture lost money for the tax base, instead of increasing the general tax burden. Assuming that the state needs X dollars to function, it's better to raise that money from inefficiencies in the market than from, say, personal income tax. Since the "inefficiency" of a gift card is deliberately created by the distributer, it's a way to tax companies for allegedly bad behavior, instead of taxing labor.

But there are all sorts of practical difficulties, in addition to the fact that it's really rude to tax something at 100%, which is essentially what the proposal does.

Also, there are liberal philosophical objections to arbitrary government, and this proposal sounds very arbitrary to me. Like you say, there's no logic to it.

December 27, 2006  
Blogger Seth Zlotocha said...

Raising money from inefficiencies in the market is an interesting way to look at it. My initial thought was Kessler was simply trying an underhanded way of forcing companies to be more explicit about their expiration dates -- the idea being that companies would simply extend or lift completely the expiration dates if there was no way they'd be able to recoup their value. But the obvious trouble with this tactic is that it's more controversial than the legislation that explicitly ends the expiration dates -- legislation that failed in the past.

December 28, 2006  

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