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Should the government get your gift card?

A rack at a store sells several store-branded gift cards.
A rack at a store sells several store-branded gift cards.

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In New Jersey, a new state law is poised to go into effect that would give the New Jersey Treasury Department the balance of any gift card that was unused two years after the date it was bought. The state would then have access to that money, but if a gift-card owner wants their money back they can fill out the proper forms and the assets will be returned to them, no matter when they make the request.

Proponents of the new law say that’s the major difference between the government taking the funds on the gift card and it sitting in a drawer somewhere. They say when the card sits in a drawer the card issuer can start imposing fees on the card after a couple of years and simply eat up the funds on the card. Not to mention that they were paid for the card and never had to hand over any merchandise for it.

According to the lead sponsor of the bill, republican Assemblyman Declan O’Scanlon, if the government takes the money it will actually be in a place where it can do some good, and consumers will always be able to get their money back — as long as they fill out a few forms.

The law prompted companies like American Express to pull its gift cards from the shelves of pharmacies, supermarkets and convenience stores with similar third party suppliers of gift cards set to follow suit. The gift card industry claims that consumers don’t need the added protection of the government safeguarding their money, they’re well protected under the federal CARD act.

They also say the law is so vague that they have no idea what they need to do to comply with it and if they’re forced to ask consumers for certain details they may run afoul of privacy laws.

How likely is it that rules like this could spread beyond New Jersey? It has been well documented that the amount of unused gift cards nationwide is in the billions of dollars annually, but does the state have any right to that money? Would you like to see the funds on your unused gift-card being used by the state or being eaten up by fees from the credit card company?


Declan J. O'Scanlon Jr., Republican Assemblyman in New Jersey; lead sponsor of the gift-card bill.

Terry Maher, General Counsel, Network Branded Prepaid Card Association (NBPCA)