End gift-card grab for N.J. budget
New Jersey’s attempt at a gift-card grab from consumers has created a fresh casualty. American Express has decided that New Jersey is not everywhere it wants to be, to cite a slogan from rival Visa.
AmEx decided this week to pull its co-branded gift cards from retailers’ shelves in the Garden State, rather than comply with part of a law intended to let the state suck any remaining value out of the cards after two years.
The amendment to the state’s unclaimed property law is still being litigated in the courts, so the state hasn’t taken any gift card value yet. But a ruling last month allowed the state to start requiring the gift card sellers to record buyers’ ZIP codes — a key component in the Treasury Department’s effort to establish which cards were sold to New Jersey residents.
Too much trouble, an AmEx spokesperson said.
American Express and the Retail Merchants Association are among those that have sued to overturn the law. It was enacted at the behest of the Christie administration — with the concurrence of the Democrat-led Legislature — to fill an $80 million hole in the 2010-2011 budget.
There’s much more wrong with this law than postal code data collection. While the gift cards’ unused value will not be taken directly from consumers, if the law stands retailers may start putting two-year expiration dates on cards. (Otherwise, they might have to “eat” the value taken by the state to honor cards from customers who show up to redeem them after two years and a day.)
All of this runs counter to the welcome trend of businesses starting to issue “never expire” cards, with no inactivity fees. Consumers yelled long and loud to fight these booby traps.
Does the state really need this money so badly? Does it really need to create hassles for retailers? No, in both cases.
This unwise, confiscatory law also applies to phone cards and travelers’ checks. With the American Express move the start of a revolt by card issuers, lawmakers should repeal the law.