NJ lawmakers may scrap troubled gift card law NJ lawmakers may scrap troubled gift card law NJ lawmakers may scrap troubled gift card law
A legislative panel is expected on Thursday to consider legislation reversing a 2010 law that allowed the state to claim the value of dormant gift cards as revenue.
The Senate Budget Committee will vote on whether to remove gift cards from the state’s unclaimed property law. The bill also would prohibit retailers from charging dormancy fees on idle cards or imposing expiration dates on their use, two consumer protection features the industry supports, according to Retail Merchants Association spokesman John Holub.
Under budget legislation signed into law two years ago, the state can lay claim to gift cards that go unused for two years. The law requires gift card sellers to obtain ZIP codes from buyers so the state can claim the value of the cards. Without such information, the value of unused cards reverts to the company or to the state in which the company is incorporated.
New Jersey projected $65 million in revenue from unused cards, travelers checks and money orders the first year the law was expanded, but retailers sued and the law has stalled. The bill being considered Thursday would ensure it isn’t implemented.
The Assembly passed a similar measure in March by a vote of 48-27 with 4 abstentions. That bill also would reinstate a 15-year abandonment period before the state can claim revenue from travelers checks and seven years before it can claim uncashed money orders. The 2010 budget cut both down to three years and trimmed the waiting period on unused gift cards to two years.
Shoppers would still be able to redeem a card after two years. But if the state had already claimed the balance, a business would have to petition the state for reimbursement.
“The governor’s changes were decidedly anti-consumer and anti-business at a time when we should be protecting both,” said South Jersey Democrat Paul Moriarty, a sponsor of the Assembly bill.
Three major players in the gift card market told The Associated Press last month they would quit doing business in New Jersey in June over difficulties complying with the new law.
Two of the companies, Blackhawk Network and InComm, are third-party providers of gift cards sold at malls, groceries and convenience stores. Both they and American Express said they couldn’t ensure compliance since their cards are sold indirectly.
Treasury Department spokesman Andy Pratt said the administration doesn’t intend to backtrack on the 2010 law.
“We’re in the process of developing regulations based on the current law that will address some of the concerns people have,” Pratt said.
Article by Angela Dellisanti
Wednesday, May 16, 2012