New Jersey Gift Card Update – SB 1928 Signed Into Law
Posted on Jul 10, 2012 by Tim G. |
On Friday June 29, 2012, after much discussion and intense lobbying, New Jersey Governor Chris Christie signed Senate Bill 1928 into law. This bill modifies the highly controversial New Jersey unclaimed property law affecting gift cards that was adopted in 2010. The 2010 law required retailers to collect certain identifying information from the purchasers of gift cards (including the purchaser’s zip code). The requirements of the original law caused a lot of consternation in the retail industry and among those companies that distribute gift cards. Those faced with complying with these new requirements argued that the law was nothing more than a revenue grab by the state that violated the tenets of established unclaimed property reporting hierarchies. As chroncicled here on our blog, litigation ensued, and the original law has essentially been suspended since its passage. Our other recent posts highlight the reactions from card issuers- and the Governor concerning the 2010 bill.
The Highlights of the new bill include the following:
- The law applies to any cards issued after July 1, 2010
- The dormancy period for reporting & remitting unredeemed gift card proceeds has been lengthened to 5 years from 2 years
- The address/zip code collection requirement has been delayed for 4 years
- Retailers may now retain 40% of the unused SVC Balances (only 60% of the unredeemed amount left on a card is reportable as unclaimed property
- Expiration dates and dormancy fees are banned
- Gift cards issued for promotional purposes are exempt
- Gift cards issued to charitable/educational organizations are exempt
- Cash back requirements less than $5.00 – For some types of cards the cardholder can request cash back at the time of redemption, if the card has a remaining balance less than $5.00. We found notions that this could be coming back in April of this year.
Feel free to contact us with any questions, and stay tuned to our blog for updates regarding this legislation and further commentary on how it may impact your individual situation.