American Express Co. has become the first company to pull its gift cards from New Jersey convenience stores, pharmacies and groceries rather than attempt to comply with a new wrinkle in the state’s unclaimed property law.
AmEx spokeswoman Vanessa McCutchen told the Associated Press that the company began pulling gift cards sold through third-party retailers last week. As of Monday, the only way for New Jersey residents to buy AmEx gift cards, which can be used practically anywhere, is directly from the company.
New Jersey’s Treasury Department will soon require sellers to obtain the ZIP code of everyone who buys a gift card. The state believes it can then lay claim to the value of any card not redeemed after two years, under a revision to the unclaimed property law.
John Holub, president of the New Jersey Retail Merchants Association, said the law poses serious administrative burdens to businesses and potential problems for consumers. American Express Co. and the Retail Merchants Association are among the groups that have sued. The case is being litigated. However, an injunction against ZIP code collections was lifted in March.
“Retailers and gift card issuers like American Express have had serious concerns about the escheat law since it was passed nearly two years ago,” Holub told the Associated Press. “I fear many retailers are likely to follow American Express’s lead because the legal risk, technological burden and steep cost of complying is simply too great.”
Treasury spokesman Andy Pratt said the new policy is a work-in-progress and not designed to deter businesses from operating in the state.
However, McCutchen said there is no way AmEx can ensure compliance with cards sold through third parties.
Under the law, which was passed two years ago, the state can claim the proceeds of gift cards bought in New Jersey if customers don’t use them within two years. It saw unused gift cards, travelers’ checks and money orders as a new revenue source and booked $79 million from the unclaimed property in fiscal 2011.