On January 5, 2012, the U.S. Court of Appeals for the Third Circuit found that New Jersey’s recently enacted unclaimed property laws requiring retroactive escheatment of abandoned amounts from stored value cards (SVC or gift cards) violated the U.S. Constitution. Additionally, the court held that New Jersey’s priority rules for the escheatment of SVC abandoned funds were preempted by federal common law. The court, however, sustained the new requirement that issuers obtain the name and address of the purchaser or owner of each SVC issued or sold and maintain, at a minimum, a record of the zip code of the owner or purchaser. New Jersey Retail Merchants Assoc. v. Sidamon-Eristoff, Nos. 10-4551, 10-4552, 10-4553, 10-4714, 10-4715, 10-4716, 11-1141, 11-1164 & 11-1170 (3d Cir. Jan. 5, 2012); Am. Express Travel Related Servs. Co. v. Sidamon-Eristoff, No. 10-4328 (3d Cir. Jan. 5, 2012).

With the enactment of 2010 N.J. Laws Chapter 25 (Chapter 25), New Jersey amended its unclaimed property statute, N.J. Stat. Ann. § 46:30B, to provide for the escheatment of SVCs for the first time. SVCs are forms of electronic payment by which a purchaser, by tendering payment for the face value of the SVC, may obtain merchandise or services equal to the remaining balance of the SVC. Once the SVC is redeemed for purchase, the SVC issuer recognizes a profit based on (i) the difference between the issuer’s cost of acquiring the goods or offering the services and the retail price paid by the customer when the customer purchases the goods or services from the issuer; or (ii) a merchant fee paid by third-party retailers when the issuer purchases the goods or services from a retailer other than the issuer. The unclaimed property statute, as amended by Chapter 25, provides that an SVC is presumed abandoned after two years of inactivity, and requires issuers to transfer to New Jersey the remaining value on the SVCs (i.e., the abandoned amount) at the end of the two-year abandonment period. In addition, Chapter 25 requires SVC issuers to obtain the name and address of the purchaser or owner of each SVC issued or sold, and, “at a minimum,” maintain a record of the zip code of the owner or purchaser (the data collection provision). In addition, Chapter 25 provides that if the issuer of an SVC does not have the purchaser’s or owner’s name or address, the place where the SVC is purchased or issued will be presumed to be the address of the SVC’s purchaser or owner, and the issuer will be required to escheat the abandoned amount to New Jersey if the place of business where the SVC is sold or issued is located in New Jersey (place of purchase presumption).