diff --git a/packages/fuels/tests/types/contracts/std_lib_string/src/main.sw b/packages/fuels/tests/types/contracts/std_lib_string/src/main.sw
index fc9cea9152..ff1694a781 100644
--- a/packages/fuels/tests/types/contracts/std_lib_string/src/main.sw
+++ b/packages/fuels/tests/types/contracts/std_lib_string/src/main.sw
@@ -7,6 +7,7 @@ use std::bytes::Bytes;
 abi MyContract {
     fn return_dynamic_string() -> String;
     fn accepts_dynamic_string(s: String);
+    fn echoes_dynamic_string(s: String) -> String;
 }
 
 impl MyContract for Contract {
@@ -17,4 +18,8 @@ impl MyContract for Contract {
     fn accepts_dynamic_string(string: String) {
         assert_eq(string, String::from_ascii_str("Hello World"));
     }
+
+    fn echoes_dynamic_string(string: String) -> String {
+        string
+    }
 }
diff --git a/packages/fuels/tests/types_contracts.rs b/packages/fuels/tests/types_contracts.rs
index 7634db8a2a..b975a8a403 100644
--- a/packages/fuels/tests/types_contracts.rs
+++ b/packages/fuels/tests/types_contracts.rs
@@ -2071,6 +2071,14 @@ async fn test_contract_std_lib_string() -> Result<()> {
             .call()
             .await?;
     }
+    {
+        // confirm encoding/decoding a string wasn't faulty and led to too high gas consumption
+        let _resp = contract_methods
+            .echoes_dynamic_string(String::from("Hello Fuel"))
+            .with_tx_policies(TxPolicies::default().with_script_gas_limit(2000))
+            .call()
+            .await?;
+    }
 
     Ok(())
 }