Tuesday, May 22, 2012
The New Jersey Senate Budget and Appropriations Committee approved a bill on May 17, 2012, that would repeal the controversial gift card provisions of New Jersey's updated abandoned property law. S1962 would remove stored-value (gift) cards from the ranks of escheatable property the state could seize after cards go unused by consumers for two years.
The bill, sponsored by Sen. Shirley K. Turner, D-District 15, would eliminate the provision that New Jersey retailers obtain ZIP codes from gift card buyers. It was that part of the law that American Express Co. said it could not comply with, which prompted the card brand to remove its network-branded gift cards from the stores of N.J. retailers. Prepaid card distributors InComm and Blackhawk Network followed with similar plans.
Analysis conducted by First Annapolis Consulting for the New Jersey Retail Merchants Association and the Retail Gift Card Association estimated the potential annual loss of sales tax revenue to the state due to the abandoned property law would be between $64 million and $94 million.
"As gift cards exit New Jersey, this incremental spending is eliminated from the market, lowering total retail sales in New Jersey," the associations said. "Any decrease in New Jersey's retail sales would also result in a decrease in the state's sales and use-tax revenue."
The State of New Jersey Department of the Treasury said the card companies' actions are an attempt to "protect giant card issuers' anti-consumer business practices and unjustifiable profit-grabs from abandoned or forgotten gift cards."
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.