New Jersey recently amended its laws regarding unclaimed property and the abandonment period for certain types of property, including stored value cards. Under the amended law, stored value cards issued on and after July 1, 2010 and those that were issued prior to July 1, 2010 and remain outstanding as of July 1, 2010 will be presumed abandoned after two years of inactivity. Upon abandonment, the value remaining on the stored value card will escheat to the state.
The amended law applies to “stored value cards,” which are pre-funded records evidencing a promise, made for monetary or other consideration, by the issuer that the owner of the card will be provided merchandise, services, or cash in the value of the card upon presentation and where the value of the card is reduced upon each redemption. The law expressly includes paper gift certificates, gift cards, electronic gift cards, store cards, other records that contain a means of storage of information (e.g., a magnetic strip or micro-chip), and other similar instruments.
The law excludes stored value cards that have been issued pursuant to the promotional, consumer loyalty, or charitable program, where no monetary or other consideration has been paid by the card owner. The law also excludes stored value cards issued by entities that, within the past year, sold stored value cards with a total face value of $250,000 or less. Businesses that operate under a single trade name, under common ownership or control, or as a franchise of a parent business will be considered a single entity for the purpose of the law.
Finally, “activity” on the stored value card includes the purchase or issuance of the card, transactions that increase or decrease the value of the card, or communications by the card owner with the issuer regarding the balance of the card, as evidenced by a contemporaneous record by the issuer.
TIP: Companies that issue a substantial number of gift cards that have a significant aggregate value and have gift cards outstanding in New Jersey as of July 1, 2010 should be aware that any gift cards with no activity for two years are likely to escheat to the state. Companies should consider keeping records of consumer communications regarding gift cards as evidence of continuing activity on the stored value card.