N.J. Admin. Code § 17:18-3.3

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:18-3.3 - Stored value cards

(a) Issuers and holders of stored value cards:

1. Are exempt from reporting stored value cards that are redeemable for merchandise or services only that were issued or sold prior to July 1, 2010, the effective date of the Act. Holders of stored value cards redeemable for merchandise or services that were issued or sold on or after July 1, 2010, as well as all stored value cardssold that are redeemable for cash, regardless of date of sale, are not required to obtain the apparent owner's last known address at the point of transaction. However, unredeemed balances on any card must be reported to the State if the last known address on the records of the holder is located in New Jerseyand the information is available on the books and records of the seller, pursuant to N.J.S.A. 46:30B-46et seq., except for those stored value cards:

i. Issued under a promotional, customer loyalty, or charitable program for which nodirect monetary consideration has beenpaid by the owner;

ii. Issued by any issuer that in the preceding year beginning July 1 through June 30, sold stored value cards with an aggregate total value of $ 250,000 or less;

iii. Donated or sold below face value to a nonprofit or charitable organization or an educational organization; or

iv. Redeemable for admission to events or venues, if the event was held as scheduled.

2. For purposes of this subsection, sales of stored value cards by businesses that operate either under the same trade name as, or under common ownership or control with, another business or businesses in the State or as franchised outlets of a parent business, whether in or outside of New Jersey, shall be considered sales by a single issuer.

(b) Holders of stored value cards, including retailers that are issuers of cards that may be redeemed for goods or services only at their stores or on their websites:

1. Will be required to escheat 60 percent of the value of the unused balance if there is no consumer-generated activity for five years or longer; and

2. Shall not impose any dormancy charges or fees, abandoned property charges or fees, unclaimed property charges or fees, balance inquiry fees, escheat charges or fees, inactivity charges or fees, or any similar charges, fees, or penalties for inactivity with respect to the card. Neither the property nor an agreement with respect to the property may contain language suggesting that the property may be subject to these kinds of charges, fees, or penalties for inactivity. Fees may only be assessed for activation and for each occurrence of adding value to an existing stored value card, as well as for replacement of a lost or stolen card.

(c) Banks and other financial service companies that issue general purpose reloadable cards:

1. Will be required to escheat the full value of the unused balance if there is no consumer-generated activity for five years or longer; and

2. May charge any fees in addition to fees for activation or replacement.

(d) Funds associated with stored value cards issued on or after December 1, 2012, shall be valid until redemption and shall not expire. Even though a stored value card may contain an expiration date, it applies only to the card or other tangible medium through which the underlying funds may be accessed. However, the underlying liability for the funds does not expire. Cards issued as a result of promotional, incentive, rewards, and loyalty programs are exempt from this subsection.

(e) Beginning September 1, 2012, if a stored value card is issued as a gift card or gift certificate that, as a result of its usage, has a residual value of less than $ 5.00, at the owner's request the merchant or other entity redeeming the card must refund the balance in cash to the owner. The right to a refund does not apply to stored value cards covered under N.J.S.A. 46:30B-42.1.e.

(f) Issuers and holders of stored value cards are not required to report abandoned stored value cards under (a)1i and ii above or as deemed exempt from the reporting requirements by the State Treasurer pursuant to N.J.S.A. 46:30B-42.1.f.

(g) Since stored value cards issued for purposes of wage payments result in the funds being placed in a related bank account in the name of the employee, the bank has the primary responsibility for compliance with the Act. The appropriate dormancy period is three years from the date of the last customer generated transaction or contact in accordance with N.J.S.A. 46:30B-18.

(h) Stored value cards issued as a result of merchandise that is returned without a receipt that are redeemable for merchandise or services only shall be subject to the reporting requirements of N.J.S.A. 46:30B-42.1. The unused balances are subject to reporting five years from the date of last activity at 60 percent of the value of the card, in money, on the date such stored value cards are deemed abandoned, pursuant to N.J.S.A. 46:30B-42.1. Holders are prohibited from imposing on these cards dormancy charges or fees, abandoned property fees, unclaimed property charges or fees, escheat charges or fees, inactivity charges or fees, or any similar charges, fees or penalties for inactivity with respect to the card. Neither the card nor an agreement with respect to the card may contain language suggesting that the card may be subject to these kinds of charges, fees, or penalties.

(i) Conversion of the stored value card to a bank account must be initiated by the owner of the card in order to restart the dormancy period for the card. Unused stored value card balances are subject to reporting five years from the last customer generated activity pursuant to N.J.S.A. 46:30B-42.1The Act does not provide for a holder of a stored value card to impose on the card dormancy charges or fees, abandoned property fees, unclaimed property charges or fees, escheat charges or fees, inactivity charges or fees, or any similar charges, fees, or penalties for inactivity with respect to the card. Neither the card nor an agreement governing use of the card may contain language suggesting that the card may be subject to these kinds of charges, fees, or penalties. A general purpose reloadable card shall not be subject to the provisions of this subsection.

(j) For the purposes of (a) above, a card given to a consumer as a result of the consumer purchasing a minimum amount of goods or services is exempt from N.J.S.A. 46:30B-42.1, since no direct monetary consideration is paid by the owner. However, stored value cards sold as gift cards at a discount are subject to reporting at 60 percent on the full unused value of the card.

N.J. Admin. Code § 17:18-3.3

Adopted by 50 N.J.R. 2554(b), effective 12/17/2018