BUSINESS & ECONOMY

Unclaimed Property Law Has Gift Card Companies Leaving State

By David Cruz

Most of you know by now that those gift cards you get today have an expiration date, generally about two years. After that, you lose the unused value of the card. Card sellers assume that most consumers won’t use the full value of the cards and count on the unused value of the cards as income. Consumer advocate Jennifer Kim with the New Jersey Public Interest Research Group says she counsels consumers to always know the facts about gift cards and gift certificates.

“The fact is that people who use these cards don’t use them all right away and companies count on that,” said Kim. “This is exactly why we tell customers to begin with, if you’re going to give somebody a gift card, tell them to use it within two years at the most, but definitely try to spend them right away so you’re getting your full value.”

The state knows this, too. So in 2010, lawmakers passed a bill that made all the unused dollars left on those gift cards state property, requiring retailers to get zip codes from consumers so they could show they were bought in New Jersey, and the state could collect the money.

Card sellers and retailers went to court to stop it. They got an injunction, but that injunction ran out this week. Rather than comply, however, several card companies announced that they would stop selling the cards in the state — first, American Express, then Blackhawk Networks, and then InComm.

Kim says retailers will bear the burden of reporting responsibilities, but, in the end, the state is battling them for what is — your money. She says, as the saying goes, “you should use it – or lose it.”

“In general, we kind of always caution consumers to be wary of things like gift cards and prepaid debit cards that often come with hidden fees or expiration dates,” said Kim. “Generally, we recommend that if you are going to use these items and give them to somebody, that you tell that person to use it pretty quickly.”

Some lawmakers, including Assemblyman Patrick Deignan, who is Vice Chair of the Assembly Consumer Affairs Committee, say they’ll introduce a bill to rescind the law in the hopes of keeping other gift card companies from leaving the state.

With three card companies having abandoned the state and others expected to follow suit, lawmakers could find that what they thought was going to be a sweetheart deal could end up costing the state millions of dollars.


WATCH VIDEO: