A new regulation in New Jersey will require sellers of gift cards to record the ZIP code of everyone who buys a card, because the state thinks a revision to its unclaimed property laws allow it to claim the value of any unredeemed gift cards after two years. So rather than deal with all the possible hassles involved with this change, American Express has simply pulled all its gift cards from retail locations in the Garden State.

When the law was first signed two years ago, American Express had been among those suing the state over the ZIP code requirement. A temporary injunction against collecting the address info had been put in place, but when that injunction was lifted, AmEx decided it was time to remove the cards because it could not risk the liabilities involved if the third-party seller did not comply with new regulations.

“Retailers and gift card issuers like American Express have had serious concerns about the escheat law since it was passed nearly two years ago,” the president of the NJ Retail Merchants Association tells the AP. “I fear many retailers are likely to follow American Express’s lead because the legal risk, technological burden and steep cost of complying is simply too great.”

The legislators in New Jersey were so confident when the law was signed that they actually booked $79 million of projected revenue into the state’s 2011 budget. Since the lawsuit is still being litigated, the state is waiting to book any projected revenue from unredeemed gift cards.

Some NJ lawmakers are working on legislation that would alter or reverse the 2010 law.

American Express pulls gift cards from NJ stores, citing new wrinkle in law [WashingtonPost.com]

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