This client alert discusses pending legislation in the New Jersey legislature affecting gift cards.
Introduced on June 16, 2014, Senate Bill No. 2235 (the “Bill”) aims to eliminate New Jersey’s zip code collection requirement for gift card purchasers currently slated to take effect in July of 2016. The purpose of the Bill is to relieve merchants of the responsibility to collect personal consumer data on qualifying stored value card (i.e. gift card) purchases before the escheat related zip code collection requirement goes into effect in July of 2016.
In July of 2010, New Jersey amended its escheat law to require the unredeemed balances of gift cards to escheat to the State of New Jersey. Included with this amendment was a requirement for gift card issuers to collect the name and address of gift card purchasers and maintain a record of the name and address and, at a minimum, the purchaser’s zip code (“Zip Code Collection Requirement”). This Zip Code Collection Requirement is currently set to take effect in July of 2016.
The Bill proposes to eliminate the Zip Code Collection Requirement and related record retention requirements ahead of the July 2016 implementation. Since the Zip Code Collection Requirement was enacted, there has been a significant amount of negotiation between the New Jersey State Treasurer and retail merchants regarding the implementation of the provision. Retail merchants have decried the administrative burdens related to the Zip Code Collection Requirement in light of the fact that it would not accomplish the revenue-generating impact the State of New Jersey intended when the requirement was enacted. Thus, the elimination of the Zip Code Collection Requirement would be a significant victory for retail merchants that issue gift cards in New Jersey.
This Bill should be supported by all retail merchants that issue gift cards to New Jersey residents. If you are a member of the New Jersey Retail Merchants Association (NJRMA) or have a means for political influence in New Jersey, we encourage you to exercise that influence in support of the Bill. If you would like to contact the NJRMA directly, the point of contact is John Holub and he can be reached at john@njrma.org.
If you have any questions or would like to discuss the issues covered in this Client Alert in more detail, please do not hesitate to contact us.