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TagsOfficials stress consumers would not get stung
BY TOM HESTER SR.
NEWJERSEYNEWSROOM.COM
The New Jersey state government wants to benefit financially from unused gift cards and officials argue it would be for the public good.
State Treasurer Andrew Eristoff confirmed to the Assembly Budget Committee Wednesday that the Christie administration will propose legislation that would enable the state to gain control of the money that goes unspent from partially — or unused gift cards, something officials said is already done in 28 other states.
Here is how it would work.
Presently any business that sells a gift card is collecting free money on any amount on the card that goes unspent. Under the proposal, the state would collect the money, and if a card is eventually used by a consumer, the state would return to money to the business. But in the meantime, the state would be investing the money and collecting on the interest. If the card is never fully or entirely used, the state would keep the unspent money and put it toward public services.Both Eristoff and Assemblyman Louis Greenwald (D-Camden), the Budget Committee chairman, stressed that consumers could use their gift cards at any time without problems and would not play a role in the state's dealings with businesses. Greenwald noted that presently, business may charge so-called dormancy fees on unused gift cards and their value decreases over time.
Eristoff said the state currently collects money on unused money orders and travelers' checks. He said the administration expects to collect $85 million in 2010-11 and make $135 million that can go to help finance the government.
Assemblywoman Joan Quigley (D-Hudson) raised the issue and expressed concern consumers would be hurt by the process and that the cost to collect the money would not be worth the effort.
Eristoff replied, "This is very pro consumer. Gift cards that now go unused are subject to fees. Stores wipe out the balances very quickly.'' He added, "The issuer sometimes gloms onto the money, why should we not want to keep the money for New Jersey?''
The approval of the Legislature and Gov. Chris Christie would be necessary to put the program into effect. The governor support the idea.
-Statement about the Credit Card Act of 2009
So, please explain again why this is good for consumers? The "Fee problem" no longer exists.
This is going to hurt consumers, because the government is going to take away money from stores which consumers shop at (this will lead to more stores going out of business - hurting consumers due to lack of competition which will lead to higher prices). And the stores already take gift card money and invest it while the balance remains on the card. But now the government is going to take money that doesnt belong to them and do the same thing.... thats ridiculous... "Hi, im going to steal your money Mr. Business, and use it to make money for me... but you can have it back after I've made a ton of money off it and you havent."
By defining gift cards as unclaimed property subject to escheat, the State is giving businesses a good reason to issue a gift card with expiration dates to prevent the cards from being turned over to the state.
Currently New Jersey offers little protection and has been given an F by ScripSmart. I'd like to see law makers start looking after consumers and business owners, not their spending allowance.
An overview of current NJ Gift Card Laws: http://scripsmart.com/states/17-new-jersey-gift-card-law