From The Record:
Retailers are threatening to follow American Express’ lead and pull their gift cards from New Jersey stores rather than let the state claim unspent card funds under an unusual state law designed to help close a budget gap.
The Christie administration-proposed law enacted in June 2010 — apparently the only such state law in the nation — was aimed at helping to balance the 2011 state budget by raising as much as $80 million. The law allows the state to consider an unused gift card “abandoned” two years after its purchase, and to take custody of the balance, which formerly reverted to the issuer.
What I’m unsure of, as of 8 this morning, is Amex just recalling their gift cards from the Garden States’ shelves, or is it all its prepaid cards…
[Update 10:54 a.m.]
Response from Amex:
The NJ law requires zip code collection for Gift Card purchasers at the point of sale. Because American Express sells its Gift Cards through third-party independent retail partners, we are not able to ensure compliance with that part of the law. As a result, we cannot conduct any third party sales, such as those through retail locations, financial institutions, and third party selling websites, of our Gift Cards in NJ. Consumers in New Jersey can still purchase American Express Gift Cards online at www.americanexpress.com/gift. American Express Gift Cards will also continue to be accepted at locations throughout New Jersey where American Express is accepted.
[Update 1:20 p.m.]
You can see my short @AmerBanker story on the news, here.
[Update: April 5, 2012]
Prepaid distributor and marketer InComm is pulling its gift cards from New Jersey shelves, as well. Blackhawk followed this announcement with a similar release that said it, too, will be pulling its gift cards from the Garden State.