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Office Hours

Archive for December 2012

Fairchild workers could face furloughs if the ‘fiscal cliff’ talks don’t find a solution

Do you or anyone you know work as a civilian at Fairchild Air Force Base?

It may be a tough week ahead if Congress doesn't come up with a solution to the “fiscal cliff” deficit deadline.

A Wall Street Journal article notes that the Pentagon would notify up to 800,000 civilian workers to brace for furloughs in the frst month of 2013 if no solution to the deficit issue is found.

Those workers, if affected, would need to take mandatory leave without pay for a certain period. Those furloughs would be of unlimited duration, depending on how Congress resolves the standoff.

Here's the Sunday afternoon update on where those talks are, compliments of the Washington Post.

Jon Eliassen recalls the contributions to WWP board by the late Gen. Schwarzkopf

Jon Eliassen, the current CEO of Red Lion Hotel Corp., sent us this afternoon his impressions of H. Norman Schwarzkopf's contributions on the Washington Water Power board, from 1993 to 1997.

To counter any who might have thought an Army general was just window dressing on the board, Eliassen, who a company VP of finance at the time, recalls a man fully focused on the utility's business.

Eliassen's offered comment is:

“The General was a thoughtful, articulate and engaged board member, and he was always well prepared and always willing to offer comments and questions—Great military leaders translate well into very capable leaders in many business situations, and Norm was no exception.   It was a pleasure to work with him for those four years he sat on our boards of WWP and of Pentzer.”

A pictorial salute to Bernard Daines; four images from the SR archives

It was probably one of 2012's high points for me to have the chance to meet up with Bernard Daines this past month, and include him in our end-of-year “Catching Up With” series at Spokesman.com.

This collage shows four file photos, On top left, Daines back in 1997 as he was developing Packet Engines. At the right on top, an image from before Daines moved from Silicon Valley to Spokane, which appeared in the San Jose newspaper.

Below left, a staff photo back in 2002 as Daines was guiding Worldwide Packets. On the right, a recent photo taken by Jesse Tinsley.

In the 1990s Gen. Schwarzkopf sat on the Washington Water Power board

As just a little footnote to the obituary of former U.S. Army General Norman Schwarzkopf, we'll mention that the guy served for more than three years on the board of Washington Water Power, now Avista.

In 1997 SR business writer Bert Caldwell took note of Mr. Schwarzkopf's departure from the utility's board:

Gen. H. Norman Schwarzkopf will step down from the Washington Water Power Co. board of directors in May after four years of service. With the consent of shareholders, he will be replaced by John Kelly, chairman, president and chief executive officer of Alaska Air Group and Alaska Airlines.

The changes are the first since Schwarzkopf joined the Spokane utility's board in 1993. The company said schedule demands dictated the decision by Schwarzkopf, who has accepted positions on several other corporate and nonprofit boards since he retired from the U.S. Army after leading allied forces in the Gulf War.
  

Taking the board position was an obvious career move for the general at a time when he could partay his public fame into some sort of corporate credential.

One has to believe WWP brought Schwarzkopf onto the board not so much because of his executive insights.

Likely, it was WWP's attempt to add a little glitz to its board.

Despite Amazon Web Service outage, 2nd Watch bullish about cloud reliability

We ran this story today in print and online, about Madrona Venture Group leading an investment round of $4.2 million for 2nd Watch, a cloud services company with its HQ in Liberty Lake.

The press release made a major deal out of 2nd Watch having “premiere” partner status with Amazon Web Services, the cloud-service division of Seattle's large online retailer. While AWS is not 2nd Watch's exclusive service provider, it's the No. 1 option for helping other firms get on the cloud, the release noted.

And we made sure, when researching the story, to ask folks at 2nd Watch about the reliability of AWS in light of another major service disruption over the holiday.

Stories noted that AWS lost some of its data center operations in the East, with the result that at least one large consumer experience, streaming of Netflix video, was disrupted.

So we asked co-founder Jeff Aden if AWS has had any problems that affect 2nd Watch customers. Here's his reply:  “I can’t comment on Netflix as I do not know the details of what took place and there has been no postmortem on the topic. 2nd Watch has not had a single High Availability “HA” architecture or HA customer that has had a business impact due to AWS (problems).”

That WSJ.com story cited above noted: “The Amazon unit said it identified and fixed technical problems at its operations in Northern Virginia. They affected other firms besides Netflix, including Scope, a San Francisco social-media company, and software company Heroku Inc.

“Amazon hasn't offered an explanation for the source of the outage, which didn't affect its own online operations. A spokeswoman said Amazon would release a full summary of the outage in the coming days.”
  

Washington’s minimum wage to remain highest of any state at $9.19 an hour

The minimum wage in Washington will go up to $9.19 an hour on Jan. 1, keeping the state ahead of all others and nearly $2 above the federal minimum wage of $7.25.

Idaho’s minimum wage will remain unchanged at $7.25 an hour, which is just over $15,000 a year for a full-time employee. It also falls within the federal definition of poverty for a two-person household.

The Washington wage, now $9.04, changes annually to keep pace with the rising cost of living. Voters in 1998 approved a ballot initiative that provides for the rate adjustments.

The wage bump will apply to an estimated 144,000 workers – many of them in retail, food service, hotel and health care jobs – providing them an extra $310 per year on average, according to the nonpartisan Economic Policy Institute. Another 20,000 will see a raise as pay scales are adjusted upward, the Washington, D.C.-based group estimates.

Nine other states – Montana, Oregon, Colorado, Arizona, Ohio, Missouri, Florida, Rhode Island and Vermont – also raise minimum wage rates on New Year’s Day.

Most of the new rates will remain under $8, including $7.80 in Montana. Vermont’s wage will increase to $8.60 and Oregon’s will go to $8.95 an hour.

Liberty Lake’s 2nd Watch gets major investment from Madrona Venture Group

Liberty Lake cloud service company 2nd Watch, Inc. announced it's received $4.2 million funding primarily led by Seattle's Madrona Venture Group, with participation from other private investors.

Launched in 2010, 2nd Watch helps large and midsized companies move IT applications and manage company business processes with cloud-based services.

2nd Watch has become a premiere partner with Amazon Web Services, the growing cloud-service division of Seattle's large Amazon.com operationg.

A company release said the funding will help with growth. The company now has about 30 workers in its Liberty Lake and Seatlle offices.

Madrona is one of the most active Western Washington VC firms. It  manages about $1 billion and was an early investor in companies such as Amazon.com, Isilon Systems, World Wide Packets, iConclude, Farecast.com and ShareBuilder.

To read a more complete and detailed version of this story, go to Spokesman.com this evening or look in the Dec. 27 print edition of The Spokesman-Review.
  

Anyone know the headcount at Spokane Valley’s Cascade Windows?


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For some reason we were unsucessful yesterday in getting an accurate headcount for the story on the acquisition of Cascade Windows.

Cascade, based in the Valley, is a fairly large area manufacturer. Its vinyl windows are sold across the western United States (with plants in Salt Lake, Portland and Spokane).

We asked the CEO, Randy Emerson, for the Spokane headcount. He said he wasn't able to add anything beyond the press release.

The 2012 Journal of Business Book of Lists said Cascade had a headcount of 162. That sounds pretty accurate.

A previous SR story said total company headcount was around 400; that number may not be accurate anymore.

Here's the top part of today's story:

A San Francisco investment group has acquired Spokane Valley-based Cascade Windows, one of Spokane’s best-known manufacturing companies.

Altamont Capital Partners, a private equity firm with $500 million invested in several private firms across the country, did not disclose the purchase terms.

A press statement said the deal included restructuring of debt and equity among Cascade Windows investors.

The statement added the deal is meant to help Cascade pursue growth opportunities.

Cascade is one of the largest producers of vinyl windows and patio doors in the Western states. It also has production plants in Salt Lake City and Tualatin, Ore.

In 2011 the company employed about 400 workers.

It was founded in 1989 in Liberty Lake.

“We’re excited to partner with Altamont, (whose) operational focus and expertise in building middle-market companies will be invaluable to us as we look to grow the company,” said Cascade CEO Randy Emerson in the press release. Altamont Capital Partners closed its initial round of investment in early 2011.

Sterling to acquire three branches of Boston Private in Puget Sound

To read the complete story, go to Spokesman.com later Monday evening or read it in Tuesday's printed editions.

Spokane’s Sterling Savings Bank has purchased the Puget Sound operations of publicly traded Boston Private Financial Holdings, Inc.

Boston Private, a national financial services group that owns wealth management and private bank affiliates in Boston, New York, Los Angeles and San Francisco, has operated three branches in the Seattle area.

It acquired the branches in Seattle, Bellevue and Redmond in 2007 from financially distressed Charter Bank.

Sterling Savings CFO Patrick Rusnak said the acquisition made sense for both sides; Boston Private felt the branches were too distant from its East Coast offices; and Sterling considers Seattle one of its prime areas for continuing growth.

Sterling currently has 15 branches in the greater Seattle area, including in Bellevue and Redmond, Rusnak said.

One of Sterling Bank’s Seattle branches is in the same building as Boston Private’s, Rusnak said.

Sterling will pay about $96 million, Rusnak said, which covers an $11 million “premium” and the difference between the branches’ total loans and deposits.

The sale is expected to close in the first half of 2013 pending regulatory review.

Former Bulldog tavern shut down by new owner; lasted one year to the day

A year to the day after Mary Livingston opened her University Bar and Grill in the former Bulldog hangout, the business closed its doors.

The business, at 1305 N. Hamilton Street, has a long history going back decades, when it was primarily the Bulldog Tavern and catered to the Logan neighborhood and Gonzaga University students.

Livingston bought the business and renamed it. Her business website noted that Saturday marked the one-year anniversary, as well as final call: “We want to thank the many, many loyal students, faculty and neighbors for making this a truly outstanding first and last, year,” Livingston said. “We are going to miss all of you.”

We intend to follow up and learn from her what her options are. As of a year ago, Livingston said she was buying the building from property owner Willard Quinn III.

The photo here shows Livingston outside and next to the bar's distinctive mural highlighting notable GU alumni.

AT&T launches first Eastern Washington LTE (true 4G) service in Pullman

If you're a big fan of LTE (long term evolution) mobile data, AT&T has news.

The wireless provider announced it's deployed true LTE service in the Moscow-Pullman area.

So, to confuse things, the way mobile connectivity works, LTE is considered important because it qualifies as “true 4G” service. True 4G data speeds are generally 10 times faster than mobile 3G networks.

Verizon, Spring and AT&T all offer 4G service in Spokane and Coeur d'Alene.  Verizon can properly claim to be the first wireless carrier with LTE service in Spokane.

AT&T hasn't said when it will bring LTE service into Spokane. At present, it offers a hybrid network here called 4G HSPA+. And that, according to an AT&T spokesman, is roughly four times faster than 3G.

Pullman and Moscow get AT&T’s first Eastern Washington LTE data network

If you're a big fan of LTE (long term evolution) mobile data, AT&T has news.

The wireless provider announced it's deployed true LTE service in the Moscow-Pullman area.

So, to confuse things, the way mobile connectivity works, LTE is considered important because it qualifies as “true 4G” service. True 4G data speeds are generally 10 times faster than mobile 3G networks.

Verizon, Spring and AT&T all offer 4G service in Spokane and Coeur d'Alene.  Verizon can properly claim to be the first wireless carrier with LTE service in Spokane.

AT&T hasn't said when it will bring LTE service into Spokane. At present, it offers a hybrid network here called 4G HSPA+. And that, according to an AT&T spokesman, is roughly four times faster than 3G.

Spokane’s Keyboard Cat gets top billing in Google Chrome app’s promo

Charlie Schmidt, one of Spokane's most viral artists, got a nice little early present from Google this year.

The search giant and software company used Schmidt's legendary web-craze Keyboard Cat in an online promo for the JAM app used with the Google Chrome browser.  See that promo at the link here. The app lets people from different computers play music together.

We didn't ask how much Google paid him to use the cat and cat tune in the promo. It's probably a decent figure.

Spokesman.com reporter Tom Sowa wrote about Charlie Schmidt's continuing effort to patrol the web and find offenders who use Keyboard Cat without compensation to him. Here's that story.

The showrooming trend and how it’s affecting Spokane’s retailers

We spent some time trying to describe the reactions of local retailers to the trend called showrooming. Today's news story touches on that trend, describing showrooming as the use of smartphone by consumers to shop a store and find the best price (either in-store or online or with another store).

Many local retailers who were regionally based don't see a lot of showrooming. Hasting's, for instance, hardly ever sees it, a company spokesman said. We found the same at Barnes & Noble, even though we didn't spend a large amount of time in the store looking for instances.

Stores like Costco and Walmart don't see it a lot either, as showroomers typically are trying to leverage an online price to convince the local store manager to match or beat the online price. In Walmarts and Costcos, the prices don't change that way;  as managers there constantly see prices in their stores changed by headquarters as the market dictates.

We did talk with the foks at Huppins and at national chain Best Buy. Both companies acknowledge seeing plenty of showrooming. Both say they've learned that showroomers are customers waiting to buy, and they respond accordingly.

Our daily story is premium-content, meaning you need a Spokesman.com subscription to read it. However, if you search for “Spokesman.com and Showrooming,” your Google result should let you in to the full article on the traditional free-pass basis.

The graphic here is by way of Aprimo, a mobile technology consulting company. Click the graphic to see a larger version.

Biggest medical news of the month: Post Falls to open 30-bed rehab center in 2013

Kootenai Health, the company that runs Kootenai Medical Center, has joined deal with a New Mexico company to build a 30-bed rehabilitation hospital in Post Falls.

Called the Rehabilitation Hospital of the Northwest, the $11 million center is expected to open in fall 2013 and employ roughly 120 people.

Operating the center will be Ernest Health Inc., an Albuquerque company that operates 18 rehab centers and hospitals throughout the United States. It also operates the Northern Idaho Advanced Care Hospital, an acute-care facility in Post Falls.

The new rehab center will be on the same campus as the advanced care hospital, in a free-standing building, said Linda Murphy, a spokeswoman for the new facility.

Kootenai Medical Center has 14 beds for rehab care, but is often unable to take patients due to care limitations.

The new facility will provide care for patients needing a range of services, including rehab for those with head or spinal injuries, said Jeremy Evans, vice president of professional services for Kootenai Medical Center, which is operated by Kootenai Health.

Doctors and practitioners, including rehab-care workers now at Kootenai Medical Center, will be encouraged to work at the new facility, said Evans.

Kootenai Health is not investing money in the project, Evans added. “We see this as a great opportunity to partner with a national company with expertise and to help us broaden the scope of services available to the community,” he said.

Kevin Parker, the business owner, to discuss social media Thursday

There's Kevin Parker the state legislator. There's Keven Parker the business owner.
 
That second guy is the featured speaker at Thursday's Numerica and Whitworth Small Business Support Center (SBSC) discussion, running 6:30 p.m. to 7:30 p.m.

It's at the Numerica Credit Union at 405 E. Farwell Road.
 
Parker is owner of a number of Spokane area Dutch Bros. coffee shops. He's going to discuss business growth and the use of social media to propel a small business.
 
Thursday's event is sponsored by Numerica Credit Union, Petit Chat Village Bakery and www.cureforcat.com. and Whitworth University.
  

 

Saad’s Shoe Repair closes downtown store, leaving one shop at NorthTown


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The downtown Saad's Shore Repair store at 215 N. Wall closed at the end of November.

A note on the door directs customers to the Saad's store at NorthTown Mall. Owner Larry Alfano wrote that the recent untimely deaths of longtime Saad employees William Ogle Jr. and Ruth Carter precipitated the decision.

We'll try to keep track of possible tenants interested in taking over the Saad location downtown.

The first Saad's went into the building in 1906, Alfano said. He bought the shoe repair business from the Saad family in 1986. At the time, he operated four stores, including shops at Manito Shopping Center and U-City Mall. 

As shoe repair declined, the last two stores were downtown and at NorthTown.

The NorthTown store is open Monday through Saturday, said Alfano.

The S-R ran a story on the death of Ruth Carter in November. She worked at Saad's for nearly 60 years.

Several Spokane shoe repair businesses are still operating, including Goodyear Shoe Repair, Cruz Custom Boots, the NorthTown Saad’s and Ressa’s Shoe Service.

ReliOn lands on major list of 200 green-tech pioneering firms

Spokane's ReliOn has landed on a notable industry list: the AlwaysOn Going Green Silicon Valley Global 200 listing of notable tech firms. Basically, it's a checklist of major firms that are moving the ball forward in green technology.

The list was compiled from U.S. and international tech companies that were nominated by investors, bankers, journalists and technology industry insiders. 

Two other Washington firms landed on the list as well:

Spokane area lands (again) on great places to retire list

Not widely seen as a source of economic development is the appeal this area has for folks 65-and-over.

A number of publications have recognized Spokane is considered is a good place to retire. At least if you don't mind winter (or can get away until April).

Another publication just agreed with that belief: Where to Retire magazine.

Editor Mary Lu Abbott in the latest issue wrote: “Spokane possesses qualities important to today’s retirees. Signs like rising home prices and falling inventory point to a rebounding housing market. Our eight locales, including Spokane, offer boomers excellent buys now, with the possibility for value appreciation in the future, as well as an active retirement lifestyle, ” Abbott said.

The other cities mentioned are Salem,  Reno, Palm Springs, Calif., Wilmington, N.C.; Marietta, Ga.; Hagerstown, Md. and Gainesville, Fla.

What's the business takeaway: Abbott summarizes it thus: Each year 700,000 Americans relocate to new towns to retire. Generally, relocating retirees are healthier, better educated and more affluent than those who choose to not relocate. They bring significant economic benefits to their new states and hometowns. Nationally, two dozen states and hundreds of towns seek to attract retirees as a source of economic development.

OfficeHours gets into pot discussion: a classic book cover from the ‘60s

OK, ladies and gentlemen, you're about to read OfficeHour's commemorative first-but-maybe-not-last pot entry.

Now that Washington has legalized indoor smoking of marijuana, we just had to find something to add to the discussion.

Here it is:  A classic Penguin paperback book, The Strange Case of Pot, published in 1969 and written by Michael Schofield.

It was one of the earliest serious attempts to argue in favor of legalization.  The geometric cover was designed by by Germano Facetti.

We found the cover and several other very choice Penguin cover designs from the Guardian. Click to view.

Bob Apple reappears, will operate a new sports bar on Spokane’s South Hill

Former Hillyard bar owner and Spokane city councilman Bob Apple plans to open a sports bar on the city’s South Hill.

Apple, who served on the council from 2004 through 2011, has applied for a liquor license for a new business at 5620 S. Regal.

The license lists the business name as Somewhere. Apple said that’s a placeholder name, and is likely to change.

“I hope to open before the Super Bowl,” he said, adding, “but you never know how long it takes to get your license.”

Apple said the bar will be roughly 4,700 square feet. He’s leasing the building from the Swartout Family Trust, and said he’s in the process of completing tenant improvements.

Back when he ran the Comet, Apple made headlines (no pun intended) by not stocking toilet paper in his bathrooms. He said he couldn't afford the cost of replacing the paper thieves took from the privy.

Here's a Doug Clark column on the Comet's paper thin legacy.

Apple was also the owner of The Comet, a restaurant and bar in Hillyard. He sold that business two years ago, and the new owner renamed it Usher's Corner, Apple said.

File photo: from Spokesman.com. Photo taken when Apple served on the Spokane City Council, with Dennis Hession as council president.

Pitney Bowes cuts Spokane call center by 36 jobs, 24 jobs moving elsewhere

Spokane's Pitney Bowes call center is losing 36 jobs, the company announced on Thursday.

Of those jobs, 24 are relocting to another call center Pitney Bowes operates in Appleton, Wis.

The Spokane site, at 1313 N. Atlantic, has employed more than 400 workers in the past. It's one of three major call centers that serve Pitney Bowes customers who buy mailing and document management equipment.

Pitney Bowes spokesman Matt Broder said the Spokane operation continues as one of the company's main service locations. In addition to Spokane and Appleton, Pitney Bowes has a service center in Norfolk, Va.

The relocation is being done to help PB align workers who do the same work to be based in the same building, “which is  more efficient for us as a company,” he said.

WSU appoints David Cillay to new post of VP of the Global Campus

Washington State University has created a new VP position, vice president of the Global Campus. Yes, WSU likes to capitalize the idea — Global Campus.

They've chosen WSU veteran David Cillay to take on the job. The goal is to find key ways for the campus and its stakeholders to make better use of digital technology.

The Global Campus was launched in July.  Elson Floyd, WSU's president, laid out the key targets for the new effort:

  • Expand WSU’s educational market share
  • Support faculty in developing and implementing technology and pedagogical innovation
  • Ensure that WSU remains open and accessible through digital and eLearning tools and strategies

Cillay said the new goals of the Global Campus also include evaluating emerging models for non-traditional higher education program delivery, disseminating WSU research to a global audience and helping the university navigate the evolving regulations that govern eLearning.

One of Cillay's efforts at WSU included using the online world Second Life as a teaching and recruitment tool. The photo here is from a Spokesman.com story that appeared in 2008.

In the photo, Cillay posed in front of his Second Life alter-ego. Cillay uses the game to interact and educate students and people interested in WSU.

Swami says: You can’t go wrong with gift cards from Walmart, Target, McDonald’s

Holiday Gift Cards, anew.  We posted yesterday about federal efforts to eliminate expiration dates on gift cards.

Today, we list the top 20 favorite gift cards, by retailer. This list comes by way of GiftCardRescue.

You can see the list yourself in this graphic, from GiftCardRescue.

The website, which sells gift cards, said it's conducted surveys over the past five years to arrive at this list.

It said it relied on roughly 20,000 gift card wish lists to produce this listing.

On top this year is Wal-Mart, followed by Target, McDonald’s, Amazon.com and Home Depot.

“What has been remarkable to watch is the steady rise of McDonald’s gift cards in the rankings over the last few years to claim the No. 3 spot in 2012,” says Kwame Kuadey, CEO of GiftCardRescue.com. “Other than that, the top five most wanted gift cards have remained consistent.”

Jay Inslee will join Wednesday’s GSI ‘meet your legislators’ session downtown

Yesterday's Officehours post about Wednesday's GSI Meet Your Legislators has to be updated.

GSI this morning confirmed that Gov-Elect Jay Inslee will join the event, which starts at 3 p.m. at the Davenport Hotel.  Yesterday's entry described who else will be there.

Key details: It's in the Davenport Pennington Room; the forum runs 3 to 5 p.m..

Inslee has stated he intends to hang around at the reception starting around 5:15 p.m. in the same place.

Cost: $50 for members of GSI, $80 for others.
  

This week’s networking event lineup: Mobius, No-Li and meet some legislators

The weekly lineup of events and morning sessions include the following:

  • Dec. 4,  a conversation with Chris Majer, hosted by Greater Spokane Inc. At the GSI offices downtown, from 7:30 to 9 a.m.  Cost of tickets: $25 for members. Majer played a key role in raising funds and building support for the new and expanded Mobius Science Center. He's listed as the founder and CEO of that nonprofit education center.
  • Dec. 5, GSI sponsors another of its regular “Meet Your Legislators” sessions. This Wednesday evening event is at the Davenport Hotel, and includes visits by Rep. Timm Ormsby (D - Spokane), Sen. Mike Padden (R-Spokane Valley) and Rep. J.T. Wilcox (R-Yelm). The session runs from 3 to 5 p.m, followed by 5:15 p.m. reception. Cost is $50 for members, $80 for others. Register here.
      
  • Dec. 7, Spokane MarCom Group sponsors a 7 a.m.-9 a.m. “branding your business” session at the Lincoln Center, featuring John Bryant and Mark Irvin describing their vision for Spokane's No-Li Brewhouse. To register, go to the group site, www.SpokaneMarCom.org. Advance ticket purchase is suggested. 

The event includes a breakfast, and costs $20 for members at the door, $30 for non-members, $5 for student members and $15 for student non-members.

 

Liberty Lake cloud services firm 2nd Watch gets partner status from AWS

Spokane companies generally aren't pushing the boundaries of cloud technology. Except for a few, and one of the best examples is Liberty Lake-based 2nd Watch, Inc..

We at Officehours haven't called 2nd Watch's number all that often this year. This week we do have one news item that brings them into a bit more focus.

Amazon Web Services (AWS) has created a “premier consulting partner” system to establish a top tier of providers it regards as key providers of cloud services. It recently named 2nd Watch part of the program.

A press release noted  2nd Watch is part of 15 companies given the premier consulting partner designation. 

The release added: “The achievement …  from Amazon Web Services represents a major milestone in our strategic plan. Our success can be attributed to forward-thinking leadership, a highly technical and operationally-focused staff, and numerous positive customer experiences,” stated 2nd Watch co-founder and president Jeff Aden.

“This recognition highlights our commitment to bringing AWS to companies, allowing them to become more agile and freeing up additional capital for strategic business expansion.”

Buying gift cards this holiday? Federal bill tries to create no-expiration rule

Gift cards are everywhere, and especially in the minds of stocking-fillers.  We bring you this worthwhile update, on efforts to pass a law that bans expiration dates on credit cards.

And on first blush, the thought comes jumping out: Why should the federal government care to create legislation that affects a minor and relatively self-regulated part of commerce?  Really, do we need the government to step into gift cards?

That matter is debatable.  Clearly, the federal government has incrementally started looking at how to change the way merchants and retailers end up with a fairly large amount of money that lands in their lap.

Advocates say retailers are the undeserved winners of large amounts of money because card receivers either forget to redeem cards or lose them.

An analyst has said Americans each year spend about $65 billion in gift cards, excluding bank-issued prepaid cards. And of that total roughly $6.8 billion goes unredeemed, based on research by TowerGroup, a financial-consulting firm.

Gift-card providers argue such laws are unneeded and unfair, forcing them to gather information that they haven't had cause to gather in the past. In response to a New Jersey law, American Express has said that it plans to stop selling cards in the state rather than have to comply with the law.

Hence, this update on efforts in Congress to create rules that would prevent the creation of gift card deadlines.

Here's the backdrop: The Gift Card Consumer Protection Act, introduced by U.S. Sen. Richard Blumenthal (D-Conn), would prevent companies that file for bankruptcy from selling gift cards and require them to accept and honor unredeemed gift cards.  Currently, if you get a gift card from a retailer that declares bankruptcy, the prospects of redeeming it range from slim to none.

Blumenthal said these protections would significantly strengthen present law, which permits expiration of cards after five years, and non-use fees after one year. The new bill would bar such deadlines and fees at any time.

In addition, the bill would extend gift card protections to certain types of cards that current federal protections do not cover, including loyalty, reward and promotional gift cards, such as cards you redeem with credit card points.   

The bill also tries to prevent companies from hiding or not clearly disclosing fees that hit the cardholder if not used by a certain time.

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Scott Maben Scott Maben is a Deputy City Editor who covers North Idaho news and higher education.

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