NJ wants to collect on unused gift cards

Associated Press

TRENTON, N.J.

Remember that gift card you got from Aunt Francine but never spent? New Jersey would be more than happy to take it off your hands.

The state soon will begin requiring gift-card sellers to obtain ZIP codes from buyers so it can claim the value of cards not redeemed after two years. At least one major seller, American Express, has pulled its cards from shelves rather than attempt to comply.

Shoppers still would be able to redeem a card after two years if it hasn’t expired. But if the state already has laid claim to the money, businesses might have to jump through administrative hoops to get reimbursement — and therefore stop selling gift cards altogether to avoid the hassle.

“No other state in the country requires this of retailers,” said John Holub, president of the New Jersey Retail Merchants Association, which represents 3,500 retailers and is one of three groups to sue over the law. “The loser is going to be the consumer, because gift cards from some of their favorite retailers may no longer be available.”

There is no way American Express Co. can ensure compliance with cards not bought directly from AmEx, company spokeswoman Vanessa McCutchen told The Associated Press. So the company began pulling gift cards in New Jersey last week.

By Monday, there were none left at groceries, pharmacies or convenience stores in the state. The only way for New Jersey residents to buy AmEx gift cards, which can be used practically anywhere, is directly from the company.

The state saw unused gift cards, travelers checks and money orders as potential new revenue sources and projected the state could get $79 million in the 2011 fiscal year. Without information about the consumer, the value of the unused card would belong to the company.

The Legislature passed the law along with the budget two years ago. Lawsuits quickly followed, and the collection of ZIP codes was suspended temporarily.

The merits of the cases, since consolidated into one, have yet to be argued. But the injunction has been lifted.