A couple of days ago I wrote about American Express choosing to stop selling gift cards in New Jersey, a reaction to recent changes in New Jersey gift card law. I also mentioned others might follow suit and today another major player in the gift card industry announced plans to stop selling gift cards in the state of New Jersey: InComm.
InComm issues two of the higher scoring bank-issued gift cards rated by ScripSmart: the Vanilla Visa Gift Card and Vanilla MasterCard gift card. The company will stop selling gift cards in New Jersey by June 30, 2012.
Importantly, InComm also operates several "gift card malls" kiosks often located in grocery stores, convenience stores and gas stations. In short, they help companies like CVS Pharmacy sell gift cards on behalf of other merchants. For example, if you want to buy an Amazon Gift Card, you can visit your local convenience store and pick one up along with a plethora of other options. By removing many of these gift card malls it will certainly put the changes to New Jersey's laws on their radar of more New Jersey consumers.
According to the InComm's press release, the company "...is unable on behalf of its third-party gift card partners to ensure compliance with this law." In other words, they can't ensure the clerk at your local convenience store will be able to capture zip codes from buyers. While I don't believe it's not possible to enforce such a practice (they could suspend sales until the systems are ready), it is something which would not even be helpful in determining the true location of a gift cardholder because the person who buys a gift card (and give their zip code) often gives it to another person (who has another zip code).
For the record, ScripSmart is against gift cards being considered unclaimed property and make no mistake about it: consumers are the ones who will loose out as a result of the changes in New Jersey's laws. These moves by gift card issuers are will preventing the state of New Jersey from seizing gift card funds (after a mere two years of inactivity), make a statement to consumers who buy gift cards and set a precedent for other states who may be considering similar legislation.
Believe it or not, New Jersey lawmakers who sponsored the bill actually claim this is an effort to protect consumers, but it's really about "free" money for the state. But we all know there isn't any such thing as free money and in this case it comes at the expense of consumers and businesses.
This is simply a step in the wrong direction for consumer protection when it comes to gift cards and it seems likely InComm and American Express will not be the only ones to leave New Jersey.
Update 04/05/2012: Blackhawk Network another major provider of gift card malls has announced they will stop selling gift card in New Jersey unless the law is revised.