Gift card regulations can have a significant impact on retailers, payment providers, and consumers by influencing how prepaid products are sold and managed. Changes to state laws governing gift cards, including rules around unclaimed property and purchaser information, can affect product availability, compliance costs, and the overall customer experience.
As governments continue to update regulations surrounding prepaid payment products, issuers and merchants must balance regulatory compliance with consumer convenience. Legislative changes can reshape distribution strategies, requiring companies to adapt how gift cards are marketed, sold, and serviced across different jurisdictions.
American Express has said it will no longer sell gift cards at New Jersey retailers. The move was in response to the New Jersey law that would require gift card issuers to collect zip codes from all purchasers so that the state could claim unused gift card balances after two years.
AmEx spokeswoman Vanessa McCutchen told The Associated Press that the company began pulling gift cards sold through third-party retailers last week. As of Monday, the only way for New Jersey residents to buy AmEx gift cards, which can be used practically anywhere, is directly from the company.
The law would apply to both closed-loop and open-loop gift cards. Several retailers have said privately that they would also stop selling gift cards in New Jersey rather than try to comply with the law. The move was largely seen as an attempt by the state government to find an easy source of income to help balance its budget. A bill to repeal the law has already passed the state assembly, but there is no guarantee on whether or not it will pass the state senate or be signed by the governor.
The evolving landscape of gift card regulations highlights the complex relationship between consumer protection, state policy, and payment innovation. Regulatory requirements can influence where and how gift cards are sold, creating operational challenges for issuers while potentially affecting consumer access.
As prepaid products continue to grow in popularity, payment providers and retailers will need to remain responsive to changing legal requirements. Maintaining compliance while preserving a convenient customer experience will remain a key priority for organizations operating in the gift card market.
Click here to read more from The Associated Press.
