Sunday, January 9, 2011

New Jersey Gift Card Requirements Extended to February 1st

We continue to follow the constantly evolving news regarding New Jersey's attempts to regulate gift cards. As many of you know, gift cards that have been dormant for 2 years are now subject to the reporting and delivery requirements on the NJ Unclaimed Property Act.

Other parts of the legislation, which took effect this summer, remain unsettled and the subject of federal litigation between numerous trade groups and the state treasurer. For example, one provision of the law that sought to create a legal presumption that all cards sold in NJ were sold to NJ residents ( the "Location Presumption") has been enjoined by the federal court until further notice.

The fate of another provision of the law - requiring card issuers to obtain the purchasers' zip code at the time of purchase - remains unsettled. The parties to the litigation disagree as to whether the court's previous ruling stopping the Location Presumption also applies to the zip code requirement, and both sides have asked he court to clarify it's earlier ruling. While the parties wait for ruling, the Treasurer issued an announcement last week further delaying the start date of the zip code collection requirement until 2/1.

The court will likely provide additional guidance before that date, and we will continue to follow the story.


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