Gift Cards in New Jersey could be a thing of the past

SPARTA — All those unredeemed gift cards that end up stuck to gooey pieces of old gum at the bottom of a purse or lost among the clutter of a junk drawer could still have value if they are less than two years old. But if they are more than two years from their issue date and purchased in New Jersey, the state will now get the unclaimed cash, according to revisions in a law which requires retailers to collect zip codes of purchasers. American Express has now pulled its gift cards from all New Jersey retailers in protest, and other card companies may soon follow their lead. Injunction lifted The revision to the unclaimed property law, signed by Governor Chris Christie in 2010, has been the subject of a law suit brought by American Express and the New Jersey Retail Merchants Association since shortly after it was passed and a U.S. District Court issued an injunction against the collection of the zip codes. The merits of the case have not been argued in court yet, but after a hearing last month the injunction was lifted. This was the final straw that led to Am Ex pulling the plug on gift card sales across the Garden state. According to an Associated Press report last week, the New Jersey Retail Merchants Association said the law poses serious administrative burdens to businesses and potential problems for consumers, citing legal risks, technological burdens, and the steep cost of complying with the law. Am Ex was the first company to pull its cards from New Jersey stores, but others companies have discussed the possibility as well. Both the Sparta CVS and the Stop and Shop stores report Am Ex removed their cards two weeks ago, and it is the same for both companies state-wide. The only way for New Jersey customers to purchase an Am Ex gift card now is online. The unclaimed property law lays claim on unredeemed funds from travelers’ checks, money orders, as well as the unused gift cards. The state saw this as a new revenue source that could help bridge the budget gap, and hoped to bank around $79 million from the unclaimed property in 2011. Before the provisions in the new law took effect, if a gift card was not redeemed, the retailer that sold the card kept the cash. The 2010 law shortened the abandonment period for money orders and travelers’ checks and created a state claim on unused stored value cards. Assemblyman Patrick Diegnan of Middlesex County is one of three democrats sponsoring a bill to reverse the changes to the unclaimed property law. The Assembly passed the proposal last month, but a similar bill has not yet been introduced in the state Senate. Assemblyman Gordon Johnson of Bergan County, a co-sponsor of the bill, told the Associated Press, “The last thing businesses and consumers need right now is laws targeting them. We should be promoting businesses and protecting consumers, not going after them, especially in this difficult economy.”