(NEW YORK) — American Express is no longer selling gift cards in New Jersey because a unique law allows the state to claim the money from unspent gift cards after two years.
There are similar laws elsewhere, but only New Jersey wants merchants to collect zip codes at the point of sale, and American Express says it is “not able to ensure compliance with that part of the law.” The measure would classify gift cards unused after two years as “abandoned.”
When it first proposed the law a couple years ago, the Christie administration said there may be $79 million worth of unused gift cards, money orders and travelers checks languishing in drawers and wallets.
The law is currently the subject of litigation so it hasn’t been enacted. And retailers have been fighting it.
John Holub at the N.J. Retail Merchant Association says gift cards never expire: “They’re as good as cash and they’re good forever.”
If a customer comes into a store with a gift card after two years, he explains, the merchant would honor it and then apply to the state to get the money — an administrative hassle.
Once the zip code portion of the law is set, Holub expects many retailers to follow in American Express’ footsteps.
“You’re going to see a lot of other major retail brands pull their gift cards from New Jersey,” he said.
The law applies to retailers that sell more than $250,000 worth of gifts cards a year.
Copyright 2012 ABC News Radio
Kathryn Vasel, CNN Newswire
David Goldman, CNN