Although they are neighboring states, New Jersey and Delaware have not always seen eye to eye. In 2008 New Jersey sued Delaware in the U.S. Supreme Court over a border dispute, and the Court held in favor of Delaware.1 Tempting fate, New Jersey’s recent unclaimed property legislation creates a new clash between the two states that could again require Supreme Court resolution. Even if the states avoid a collision, there are enough other problems with the new law to cause even the calmest unclaimed property professionals to whinge. This article identifies the issues on which holders should focus and highlights areas for improvement for New Jersey politicians.2

Background

On June 30, as part of New Jersey’s many desperate moves to fix its budget and debt crisis, the state enacted significant changes to its unclaimed property laws.3 The most significant changes relate to stored value cards. The state’s previous law did not include unclaimed gift certificate balances as unclaimed property subject to state custody. That exclusion was based on a state court decision interpreting the then-existing New Jersey statute.4 The new law reversed that decision retroactively and imposes additional compliance burdens on issuers of stored value cards. Because the law was introduced and adopted all in a period of less than five days, numerous problems and controversies immediately erupted in the aftermath of its passage.

New Stored Value Card Provisions in New Jersey Unclaimed Property Law

Stored Value Cards as Property Subject to Unclaimed Property Remittance

New Jersey’s new unclaimed property law makes the balance of stored value cards subject to remittance to the state once the cards have been deemed abandoned. Stored value cards are defined as ‘‘any record that evidences a promise, made for monetary or other consideration, by the issuer or seller of the record that the owner of the record will be provided, solely or a combination of, merchandise, services, or cash in the value shown in the record, which is pre-funded and the value of which is reduced upon each redemption.’’5 Stored value cards thus include gift cards, electronic gift cards, store cards, rebate cards, and paper gift certificates.