Where does the unused value of a gift card go if it is lost or sits idle for years? The unclaimed property laws, or escheat statutes, of each state provide the answer. Retailers in permitting states have taken into income the sizable balances remaining on unused gift cards, also known as breakage income, which can reach into eight figures for some large merchants.
The New Jersey legislature, in a bid to protect consumers and modernize its unclaimed property laws, created several new challenges to merchants issuing gift cards. This article can only provide a quick snapshot of the current state of the law, which will evolve as legislation and litigation continues to shape the rules.
History of Most Recent Federal and State Legislation
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