Two More Companies Pull Gift Cards From N.J. Stores

TRENTON, N.J. -- Prepaid gift card vendors Blackhawk Network and InComm are following American Express' lead by suspending sales within New Jersey stores to avoid the state's new unclaimed property law, the Associated Press reported. Both companies issued separate announcements yesterday.

The state law requires N.J. retailers to collect zip code information when selling the gift cards. If the full value of a card has not been redeemed within two years, the state believes it can retrieve it as unclaimed property.

Blackhawk supplies 175 gift card brands to 1,300 retailers within New Jersey,mainly grocers, while InComm supplies 2,500 retailers with gift card brands such as Visa, MasterCard and iTunes, according to the report.

"The passage and potential implementation of these legal changes have caused significant uncertainty for New Jersey consumers and retailers," said Blackhawk President Talbott Roche. "As it stands now, Blackhawk Network and its retail partners do not have a cost-effective way to record data from gift card purchasers or their ultimate gift recipients."

InComm also cited its partnerships with third parties as a reason to leave the state, noting that it could not ensure compliance. "We unfortunately have no choice but to remove all our gift cards and gift card destinations from retail locations in the state of New Jersey," concluded CEO Brooks Smith.

State Treasury spokesman Andy Pratt said the department is surprised companies would take this step before the rules on the collection of zip codes has even been published or put into place. "We're working with them and with other members of the industry in an effort to make sure the transition to these consumer-friendly reforms goes as smoothly as possible," he said.

Pratt noted that modifications to the unclaimed property law protect consumers from reactivation fees and the deflation of dormant cards' value.

However, according to Roche, Blackhawk cards do not expire, which could result in a difficult situation if New Jersey lays claim to a card's value and its purchaser later tries to redeem it.