New Jersey’s Gift Card Law Takes New Shape
Key Unclaimed Property Act Changes That You Should Know
As of June 2012, New Jersey’s controversial gift card law underwent another
significant overhaul. In 2010, the addition of gift cards to the Unclaimed Property
Act rankled stored-value industry leaders like Blackhawk, InComm, and American
Express, prompting these companies to suspend gift card sales in the state in
spring 2012.
The act, which was initially due to take effect in November 2010, would have
required retailers to collect ZIP code information from any guest purchasing a gift
card. The state, in turn, would have been able to claim unused gift card balances
as lost property after two years of nonuse. In January 2011, the United States
Court of Appeals placed an injunction on the law.
Now, New Jersey Governor Chris Christie is responding to intense corporate
backlash by creating yet another incarnation of the infamous gift card law. The
governor’s amendment delays the enforcement of ZIP code collection until July
2016, but corporations like Blackhawk, InComm, and American Express will likely
persist in the fight to repeal that requirement altogether. Also, the escheatment
deadline was extended from two years of inactivity to five.
Although this news comes as a relief for some, the debate over ZIP code collection
continues. If enacted, the New Jersey Treasury will be entitled to millions of dollars
that would have been distributed to other states. Therefore, many argue that the
proposed ZIP code collection is a simple measure that could produce an
enormous payoff to the state. In April, New Jersey Department of Treasury
spokesman Andy Pratt told NPR: “It’s just a ZIP code. It is a far smaller piece of
data than [merchants are] already collecting about many of their customers.”
Another major change concerns $5 balances on stored-value cards. According to
the National Restaurant Association, the new amendment requires merchants to
offer cash upon request to guests with gift card balances below $5 as of
September 1, 2012. This will not apply to stored-value cards loaded with an initial
balance of $5 or promotional cards. With this change, New Jersey joins the ranks
of California and Massachusetts, which require merchants to return cash to
inquiring guests with balances lower than $10 and $5, respectively.
Paytronix will work to keep you up to date on any new developments that may
arise. In the meantime, these changes to the law should be discussed with your
attorneys and accountants.
Read the NRA article here and track changes to the law on the New Jersey
Treasury website.
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