In 2010, New Jersey lawmakers passed some rather ridiculous laws effecting those who buy and sell gift cards in the state. In short, the state started to consider gift card unclaimed property after they had been unused for two years, three years before the federal minimum of a gift card expiring. Furthermore, they require merchants to collect the zip code of those who purchase gift cards in order to establish New Jersey as the rightful owner of the property when it becomes unclaimed.
When I first wrote about the changes to New Jersey Gift Card Law, I called it an "egregious gift card money grab". There were several reasons, but mostly because such a move by the state has little to do with protecting consumers and everything to do with supplementing the state's budget.
It's Time To Get Honest About Gift Cards And Escheatment Laws
The goal of unclaimed property (escheatment) law is to reunite the property with the rightful owner. While this makes sense in a number of situations such as bank accounts and farm equipment, gift cards just don't work that same way.
The dollar amount of gift cards returned to consumers is minuscule. According to this article, in 2008, the State of New York collected $9.6 million in unredeemed gift cards and returned a mere $2,150 or 0.022%. In other words, about 22 cents for every $1,000 collected goes back to consumers. Even if that ratio was 100 times more, it would still be just $22 out of every $1,000 collected. The bottom line is unclaimed property laws don't help consumers when they are applied to gift cards.
Furthermore, we all know most often give gift cards are given to other people after they are purchased. As a result, the chances of a gift cardholder resides in another state is quite high, especially considering the location of New Jersey; a state which foolishly believes it can identify the gift cardholder by requiring merchants to collect information at the time of sale. This is nothing more than a tactic for the state to assert it's claim to the property. It's as though state legislators have never used or been given a gift card; otherwise they would know a simple fact: the gift cardholder is likely not the person who purchased the gift card.
Change Is Coming
Thankfully there are some lawmakers in New Jersey who get it. Patrick Diegnan, District 18 (Middlesex), is one of them. He's proposed Assembly Bill 3250 which reverse the laws passed by New Jersey when it comes to unclaimed property and gift cards.
If you live in NJ be sure to watch this Bill and let your representative know you'd like the money spent of gift cards to stay out of the states coffers and in the consumers hands.
Cheers to Patrick Diegnan for his common sense approach to drafting legislation. It's clear he has his constituents interests at the forefront of his mind.