Blackhawk Pulls Gift Cards From New Jersey

Network's products never expire; state would confiscate unused balance after two years

Published in CSP Daily News

PLEASANTON, Calif. -- Blackhawk Network, a leading provider of prepaid and financial payments products for consumers and businesses in third-party locations such as convenience and grocery stores, has announced plans to cease sales of gift and prepaid cards in New Jersey as a result of New Jersey's intent to implement a 2010 unclaimed property law.

The move follows similar action by American Express, which has already pulled its gift cards from the state as a result of this legislation.

A federal court injunction preventing implementation of the law was recently lifted, opening the door for New Jersey's Treasury Department to claim balances of gift cards purchased in New Jersey if consumers do not use them for a period of two years. In addition, the law requires retailers to collect customer ZIP code information when someone buys a gift card, a practice that cannot be easily implemented at a retail point of sale, and may not be relevant, since many of the cards purchased are given as gifts to other people.

Unfortunately, grocery and other retailers selling cards are not able to comply with the requirements of this law without significantly increasing their costs, jeopardizing consumer privacy, or potentially slowing down the customer check out process. As a result, Blackhawk Network is planning to remove its third-party gift and prepaid cards from the state of New Jersey beginning in June 2012, unless the law is changed.

Blackhawk Network's third-party gift cards, representing more than 175 different brands, are currently sold through more than 1,300 retail locations in New Jersey.

"The passage and potential implementation of these legal changes have caused significant uncertainty for New Jersey consumers and retailers. We are hopeful that we can come to an agreement that will work for partners, while allowing New Jersey consumers to protect their gift card balances, data and privacy," said Talbott Roche, president of the Blackhawk Network. "As it stands now, Blackhawk Network and its retail partners do not have a cost-effective way to record data from gift card purchasers or their ultimate gift recipients. In addition, gift cards sold through Blackhawk Network's program do not have expiration dates or dormancy fees, which means that consumers already have the right to the funds on their cards--forever."

"The state wants to take the consumer's funds after two years of inactivity, thereby gaining access to consumer's money. Every penny of value represented by an unused card in Blackhawk Network's program is available to the consumer forever, even without the state's intervention," said Roche. "And, if the state doesn't take these funds, no one has to go through extensive government paperwork and process to regain access to them. Without some agreement with the state, we unfortunately feel we have no choice but to cease sales of all third-party gift cards in New Jersey."

Pleasanton, Calif.-based Blackhawk Network, a subsidiary of Safeway Inc., is a provider of prepaid and financial payments products for consumers and businesses. The company's Gift Card Mall offers the industry's most popular prepaid gift card and telecom products from leading brands. Gift Card Mall, with access to 165 million unique customer visits each week, is available through a network of leading grocery stores, big box, convenience, pharmacy, specialty stores and Internet retailers including GiftCardMall.com. Blackhawk Network's business solutions include reward and incentive programs that offer choice and flexibility through a variety of card brands, custom designed Visa prepaid cards and fulfillment options.

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