What is widely regarded as the most draconian state law in existence designed to grab funds in low usage gift card accounts has been put on hold by a federal judge. The “..
federal judge has put a temporary stop to New Jersey’s plan to generate up to $80 million from unused gift cards, calling cards and money orders.”
“The law was set to go into effect earlier this week, but several companies challenged the constitutionality of it, including the American Express Travel Related Services Co., the New Jersey Retail Merchants Association, the New Jersey Food Council and American Express Prepaid Card Management Corp.
It has yet to be seen if this action comes in time to save holiday sales. Many program managers were actively depleting card inventories in preparation for a complete withdrawal of gift card products from the state; so this action is likely to be too little too late to improve merchant’s holiday sales.