Alert
07.05.12
On June 25, 2012, both the New Jersey Assembly and Senate voted to approve Senate Bill 1928, an act amending, among other laws, P.L. 2010, c.25. This law has been the subject of much controversy since it became effective in July of 2010, with litigation filed seeking to prevent its enforcement. In response, S.B. 1928 addresses the concerns raised about escheatment of stored value cards and other prepaid products, as well as newly enacted data collection obligations. S.B. 1928 would also impose on merchants and others a cash- back obligation on certain stored value cards, effective September 1, 2012.
Having been passed by both the New Jersey Assembly and Senate, S.B.1928 awaits only Governor Chris Christie's signature. Introduced on May 14 in the Senate, the bill contemplates that "[b]eginning September 1, 2012 if a stored value card is redeemed and a balance of less than $5 remains on the card after redemption, at the owner's request the merchant or other entity redeeming the card shall refund the balance in cash to the owner." This new obligation would not apply to (1) a non-reloadable stored value card with an initial value of $5 or less; or (2) a stored value card that is not purchased but is provided in lieu of a refund for returned merchandise; or (3) a stored value card that can be redeemed at multiple merchants that are not under common ownership or control, including but not limited to network-branded stored value cards. S.B. 1928 otherwise does not impose an obligation to advertise the availability of a cash refund but the issuer may elect to include a disclosure or a statement on the stored value card or other marketing materials that the card "is not redeemable for cash except as required by law" or similar statement.
Download: Will New Jersey Join Other States Requiring Cash Back for Certain Stored Value Cards?