Keane's Unclaimed Property Blog

NJ Abandoned Property: Gift Card and Travelers Check Amendment

American Express as well as the New Jersey Retail Merchants Association have targeted a recent law which altered the length of time upon which the state can seize travelers check and unused gift card balances. American Express is concerned with travelers checks and the NJRMA is unhappy with the law’s implications on gift cards.

New Jersey state treasurer, Andrew P. Sidamon-Eristoff, has been hit with two law suits concerning a measure approved back in June of 2010 which was part of the budget recommended by Governor Christie. The budget called for changes to when a travelers check or gift card could be considered as abandoned, resulting in an estimated $80 million for the state. Gift cards alone are estimated to generate $33-55 million.

The recent amendment included gift cards for the first time ever in the New Jersey Uniform Unclaimed Property Act. The adjustment declares cards that have been unused for two years as unclaimed property.

The same amendment addressed travelers checks, stating that the previous 15 year period would be reduced to 3 years concerning when a check may be “presumed abandoned”. This cleared the treasury to seize proceeds from as far back as 1994 according to the American Expresss suit which also openly identifies New Jersey as the only state that does not adhere to the standard, 15-year period.

American Express believes that the amendment interferes with the power of Congress to regulate trade amongst states, which is granted through the Constitution’s commerce clause. Mainly, American Express views the new 3 year period as a threat to their business in the state because they typically generate a return by investing the unused money until the check holder spends or cashes the balance. As a result of a September 13th hearing of the Assembly Consumer Affairs committee where merchants expressed concern, two Democratic Assemblymen introduced a bill on September 20th that would revert the amendment as it applies to travelers checks.

John Holub, president of the NJ Retail Merchants Association, said “We recognize the challenges New Jersey faces in achieving a balanced budget.” But the amendments “are in conflict with the federal system, which is binding on all states,” he added.

The NJRMA also disagrees with the section of the amendment requiring record keeping by retailers for the names and addresses of the “purchaser or owner” of every card. The intent was for there to be proof that a purchase took place within borders of New Jersey.

A clarification document was released from the NJ treasurer stating that only the zip codes of the purchaser must be recorded and that the recent amendment does not prevent a holder from reclaiming their money back from the state.

This article was inspired by this article in The Record concerning NJ Gift Cards and Travelers Checks.

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Abandoned Property, Abandoned Property Law, Dormancy Periods, Escheat Law, Escheatment, Gift Card Escheatment, State Escheatment, Travelers Checks, Unclaimed Property, Unclaimed Property Law

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