A Surcharge of Dictatorship

Last year, I referred to legislation to ban surcharges on gift certificates as going “the extra totalitarian mile,” and the intrepid Senator Chris Maselli (D, Johnston) has put on his cross-country jackboots again this year:

When Rhode Island enacted legislation a few years ago prohibiting all gift cards and certificates sold in the state from including any maintenance fees or expiration dates, the word “surcharge” was not included in the law’s language and therefore not expressly prohibited.
Businesses being ever innovative, some firms dutifully abided by the prohibition on maintenance “fees,” only to replace those with a “surcharge.” Providence Place Mall gift cards, for instance, suddenly had a $2.50 surcharge added.
Sen. Christopher B. Maselli (D-Dist. 25, Johnston) tried to stop the practice last year when he introduced legislation to ban any person, firm or corporation from adding a surcharge of any kind relating to gift certificates or gift cards. The bill was held in committee for further study.
Senator Maselli is trying again this year, and for the same reason, he says, that he sponsored the bill last year. “If you sell someone a $50 gift card and you receive $50 from the purchaser, what’s the point of charging more except pure and simple greed? If you are a business and you’re losing money by selling gift cards, then stop selling them. But don’t continue to find new ways to take the consumer for more than is fair,” he said.

Got that? Customers increasingly want to purchase gift cards, probably because they provide the added value of avoiding purchases of gifts that the recipients don’t really want (saving awkwardness and time spent in returns), and Maselli would prefer that businesses cease to offer this service rather than recoup the cost of providing it. The production and distribution of the card itself, the clerk’s time spent processing its purchase, the clerk’s time spent processing its use, and all of the paperwork entailed — the store must accept these costs as a matter of charity in the name of fairness.
That a senator (a lawyer, no less) would follow this train of thought right up to the big black hole of his own cluelessness in a press release (as opposed to an off-the-cuff remark in a live interview) illustrates how freely our state’s governing class will seek to codify into law its every petulant whim. One can’t help but link these small instances of poorly considered overreaching with our state’s looming collapse. They’re like the mild symptom of a dangerous disease — markers of a pernicious political philosophy that ultimately kills its host.
Just so the point isn’t lost, though, let me state clearly that even if a store seeks to profit to a huge degree through its gift card services, it has every right to do so. Customers always have the option of negating the need for them by taking a variety of steps, from getting to know gift recipients better to taking them out shopping to simply writing checks. Of course, if this legislation passes, they may also have the option of driving to Massachusetts or Connecticut to pay the surcharge for gift certificates.

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16 years ago

Justin, I believe Senator Maselli represents Johnston.

Justin Katz
16 years ago

Oops. I must have grabbed the info for Sen. Issa (a co-sponsor) when I glanced over at the press release for it.
Thanks for the correction, Mike.

16 years ago

It doesn’t seem smart to fight for the “right” of large companies to charge more than $50 dollars for a $50 gift card or impose sleazy “deductions” if the giftee doesn’t run out immediately and use it.
Like travelers checks the company makes money hand over fist by the “float”, by people making additional purchases when using their cards and by people who lose or forget about the certificates.The “right to contract” has its limits, especially when the “contract” consists of take-it-or leave-it fine print language on the back of a gift card.
Is it really to much to ask a business to charge $50 for a $50 card or that a person getting the card receive $50 in purchase credit?

16 years ago

I agree with Mike – this is a display of corporate arrogance that is nearly indefensible. But if it is permitted, any business that tries to hit me with a surcharge for a gift card will certainly lose my business. I don’t think I’m alone in this belief.

Justin Katz
16 years ago

“Nearly indefensible”? You’d think people were required to:
1) Shop at these stores.
2) Not give actual gifts as, you know, gifts.
3) Give monetary gifts in the form of gift certificates.
By all means, don’t shop at stores that don’t offer you a service in the way that you want. Indeed, I’d encourage everybody to spend the time to think gifts through.
But why shouldn’t businesses be allowed to charge for an added service? The only answer I’m hearing ultimately comes down to: “We don’t think it’s fair, and if we can use our votes to demand benefits from a private company, then darn it, that’s just what we’ll do.”
You’re within your rights to feel and vote that way, but I’m within my rights to think you’re kidding yourself if you claim it’s not a totalitarian impulse.

16 years ago

“But if it is permitted, any business that tries to hit me with a surcharge for a gift card will certainly lose my business.”
Rhody, that’s the whole point! It should be up to YOU as the consumer, not the state’s commissars, to make the decision to buy gift cards at any merchant you choose. If you feel like you’re being “oppressed” by a certain store, you have the right not to shop with them and to let the management know of your displeasure. If enough people do the same, then they won’t do it any more!
Admittedly, this all requires “effort” — but so do capitalism and democracy. The point is, we’d rather have the market work as intended, rather than having certain rules decreed by people who don’t have any idea whatsoever how to run a profitable business.

16 years ago

Sorry Justin but insuring mult-million dollar corporations give $50 in value to those who buy a $50 gift card is not totalitarian. What is? Drug laws, pornography laws, holding US citizens without trial and torturing them, seeking a global empire with Washington as “the boss”, warrantless monitoring of citizens phone calls, emails, etc.
All the above garner reams of support from the Bush-style so called “conservatives”.

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