It's such a money maker but no one complains because they either don't know it's happening or don't care enough to say something. But 1 million people with $10 in their account will generate $1,000/day in free money for the holder.
Deposit accounts at most banks pay you less than that, so it's unclear why you'd want gift cards to pay that much. Not to mention that turning gift cards into essentially bank accounts is going to create even more issues. Remember how we have to remind people how paypal isn't a bank? Or how would you calculate income taxes from the interest?
I would have thought the intention with such regulation as proposed by the original commenter would be that apps specifically stop offering such functionality?
If giving/receiving cash wasn't already illegal or socially unacceptable, gift card issuers would have started lobbying for that yesterday.
Other than that original use case, many people use them as a form of poorly functional digital cash (since it's not fungible across issuers) that really ought to exist natively in a currency these days.
Income taxes are easy. 1099-INT. Your bank gives you one, your brokerage gives you one, and your escrow account gives you one.
You think people are going to diligently collect all the 1099-INT forms for all the cards scattered around the house? If you forgot about a gift card, are you suddenly a tax evader?
That said, they could be required to supply a copy electronically directly to the IRS and the IRS could calculate your taxes for you. Change the responsibility for correctness from the taxpayer to the government, and offer an incentive to catch a mistake.
How does that work when gift cards aren't registered to anybody, and can be transferred between people without the issuer knowing about it?
Sell a product for $7 but only allow "recharge" in $5 increments. It pretty much guarantees that you will have tons of accounts with random dollar amounts laying around in them, never to be used. Even for regular gift cards, the counter party would be beholden to honoring them at their full value, as they should.
Besides, nothing it stopping you from rolling monthly treasuries and using those as a bank. Something people with enough money to exploit this proposed "gift card bank" would almost surely already be aware of.
I believe the real scheme is how many gift cards never get redeemed at all.
Let me fix this for you: LANDLORDS made life worse for basically every renter in the city
1. Gift cards. Users want gift cards so it doesn't make sense to penalize companies for that (by forcing them to complexify their codebase and finances)
2. Top-up cards. I haven't really seen dark patterns here. You're usually not forced to use these as far as I've seen, and are usually rewarded if you do (accumulate points, get free stuff)
The worst are these Visa/Mastercard gift cards that are popular in the US: Often horrendously expensive to the buyer and cash-equivalent to the receiver at best, and broken or scammed and causing them further frustration and possibly monetary losses at worst.
It's easy to get things wrong trying to do second order thinking, or just make things up.
There's no reason to believe companies would do as you say. There are several other options, including choosing different financial vehicles to store the users money, implementing even more dark patterns to store N% more money so they are even, or can improve their returns over the status quo.
> You can’t just ignore consequences in a policy debate.
Consequences of consequences though, you can route almost any argument to any conclusion you want :)