According to a law passed two years ago, the New Jersey Department of the Treasury will start requiring retailers to solicit the ZIP codes of gift card buyers to allow the state to follow-up on unused cards as “unclaimed property” to seize after two years. In other words, if you don’t use a gift card, money order, travellers cheque or pre-paid credit card for two years in New Jersey, Chris Christie owns it.
As a result, American Express has responded by pulling its gift cards from pharmacies, supermarkets and convenience stores. As well, Blackhawk Network and InComm, two of America’s largest gift-card brokers and suppliers, have announced that they will stop business in New Jersey in June.
According to the CS Monitor:
Unlike gift cards issued by retailers, network-branded cards like American Express and Visa gift cards have no expiration date, require no fees after purchase, and are acceptable in exchange virtually everywhere. They operate as what Mises would call “secondary media of exchange.” People therefore are willing to hold them for extended periods of time as (imperfect) substitutes for cash. Thus, based on the same reasoning, the state could declare that cash balances–in the form of currency and demand deposits–that an individual accumulates over a two year period are also “unclaimed property” and subject to seizure. Sound far-fetched? Well think again–the tax devouring politicians of New Jersey have already thought of that. The same law mandates that banks transfer to the state all funds in New Jersey resident accounts that have been “inactive” for more than two years. Of course you can appeal to the state to reclaim your “unclaimed property” but you must fill out a blizzard of forms and jump through bureaucratic hoops.
Lawyer Doug Mataconis weighs in:
That last point points out what may be one of the most unreasonable thing about the law. The fact that the some portion of the balance on, say, an American Express Gift Card, remains unused after only two years is hardly a reliable sign that it has been willfully abandoned by the owner of the card. It may just be that they’ve decided to hold on to the card for use only in an emergency, or that this was a card that was given to a college student as an “emergency fund” when they started school. If the balance remains unused after five years, you could perhaps make a reasonable argument that the property has been abandoned. Two years? Sorry New Jersey, you’re being just a little too eager to get other people’s money there.
Beyond the obvious privacy issues of the government requiring private companies to collect and transfer personal information of their customers, a gift card is the property of the owner, not the government. Simply put.