STATE – It’s getting harder to buy gift cards in New Jersey, as the result of a 2010 law that changed the way the state treats unclaimed property.
According to news reports, American Express pulled its prepaid gift cards out of New Jersey retail locations on Monday. Since then, California-based Blackhawk Network, which provides third-party gift cards representing over 175 different brands that are currently sold through more than 1,300 retail locations in New Jersey, announced that it would stop selling them in the Garden State in June. Atlanta-based InComm, which offers gift cards for brands such as iTunes®, SUBWAY®, Macy’s and Lord & Taylor at more than 2,500 retail location in New Jersey, also plans to stop selling them effective June 30.
At issue is a state law that allows New Jersey to claim the value of unredeemed cards after two years. If a consumer uses the card after the two year-period has passed, the company would then have to apply to the state to obtain the money. Under the law, retailers are required to collect zip code information at the point of sale.
The state Treasury released a statement this week that depicts the controversial law as a consumer protection measure. “Unlike balances taken as extra “profit” by an issuer, every penny the State holds in unused gift cards can be reclaimed by consumers – forever. And the value of the card is available to the customer – with interest – forever…. And if an unredeemed gift card balance is never claimed by a consumer, it is only appropriate that it be made available for the benefit of all New Jerseyans to prevent tax increases and service cutbacks.”
The companies see things differently. “The state wants to take the consumer’s funds after two years of inactivity, thereby gaining access to consumer’s money. Every penny of value represented by an unused card in Blackhawk Network’s program is available to the consumer forever, even without the state’s intervention,” said company President Talbott Roche. “And, if the state doesn’t take these funds, no one has to go through extensive government paperwork and process to regain access to them.”
Assemblywoman Annette Quijano (D-Union) called on American Express, the Legislature and Gov. Chris Christie to come together to find a solution to overcome the unanticipated effects of the 2010 law.
“When you take in the impact to the state from the loss of revenue, everyone loses,” she said. “It’s time for the governor and everyone to come together and find a solution that will serve the interests of consumers, the state and the company.”
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