The New Jersey legislature is expected to vote this week on a bill that would amend the law passed in 2010 which requires retailers selling gift cards to gather zip codes from buyers and escheat unused balances to the state after two years.
While Senate Bill 1928 would not eliminate the need to collect data, it would push out the date of compliance for another four years. It would also extend the time at which a card would be considered abandoned from two years to five years. The text of the bill can be found here.
While it looks like the bill would make it through the legislature, there is no guarantee that the governor will not veto it. Governor Chris Christie already has expressed an unwillingness to consider the retailers’ point of view, saying that he was willing to let retailers leave the state rather than consider any changes to the law.
Christie may find that retailers leaving is exactly what happens. As part of our annual closed-loop benchmark survey, Mercator Advisory Group asked retailers if they would stop selling gift cards in New Jersey if the law remained unchanged. Almost two thirds of respondents said that they would stop selling cards in the state if the law remained unchanged. Companies such as American Express, and distributors such as InComm and Blackhawk Networks have already said that they will stop selling cards in New Jersey.
Source: Mercator Advisory Group
Mercator estimates indicate that New Jersey gift card loads by retail customers could total as much as $600 million annually. So, the economic impact could be significant if all these retailers were to pull out.
While retailers had some input into the drafting of the new law, it remains to be seen how they would react to any change that may be enacted. As legislators, the governor, and lobbyists proceed, they should be aware that retailers have plans of their own, and are watching to see how things turn out.