Gift card fight takes twist in New Jersey

The movement to repeal New Jersey's controversial unused gift card fund collection policy took another twist when a bill that extends the deadline for compliance with the ZIP code collection mandate passed both houses of the New Jersey legislature. S1928 passed the Senate on June 21, 2012; the same bill in the Assembly – A3045 – passed on June 25. The legislation now awaits New Jersey Gov. Chris Christie to sign it into law.

The legislation originally repealed the collection mandate by removing stored-value (gift) cards from the ranks of escheatable property the state could seize after a dormancy period had elapsed. But now the legislation simply pushes the deadline for implementation of the mandate back 49 months.

"[S1928] was originally the repeal bill," said John Holub, President of the New Jersey Retail Merchants Association.. "And it's been turned on its head. And it's unfortunately implementing what we feel is the most onerous provisions of the bill we were trying to repeal in the first place – the ZIP code collection requirement."

Holub said the NJRMA supports the other provisions of the legislation: eliminating post-purchase fees and expiration dates from gift cards sold in New Jersey, extending the dormancy period on gift cards from two to five years, and adding a cash-back option for gift cards that have a balance of $5 or less. But the NJRMA cannot support legislation that mandates merchants collect the ZIP codes of gift card purchasers, even if that mandate is pushed back four years and one month, Holub said.

He stated that the NJRMA's concerns will not change over those 49 months. "We don't foresee anything that would change our opinion on the difficulties of retailers having to comply [with the mandate] and the negative impact it would have on consumers…. My fear is we're going to have déjà vu all over again. And we're going to be back in the exact same spot we are today."

Holub said American Express Corp.-branded gift cards will still not be sold in New Jersey retail locations; gift card distributors InComm and Blackhawk Network will still threaten to pull their gift card products from New Jersey shelves and J-hooks; and other gift card issuers will still be in a wait-and-see mode.

The good news, according to Holub, is that opponents of the mandate will have 49 more months to get it repealed.

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