American Express (AXP) has begun removing its prepaid gift cards from shelves in New Jersey due to a law that requires retailers to collect ZIP codes from purchasers at the point of sale.
The New York card brand removed its gift cards because it cannot verify retailers' compliance with the law, Amex said in an emailed statement. Amex still sells the cards online to New Jersey residents and retailers in the state can still accept the cards for payment at the point of sale.
The ZIP code collection rule stems from a 2010 law that allows the state to collect unspent funds on gift cards. Consumer can reclaim those funds at any time.
Gift card sales have "been a strong and successful business for us," said Vanessa McCutchen, an Amex spokeswoman, in an email. She would not say exactly how much business gift cards represent for Amex in New Jersey.
Amex's decision affects only its gift cards, not its reloadable prepaid cards.
New Jersey's Department of the Treasury responded to Amex's decision in a press release Wednesday.
"Many gift card issuers and merchants collect ZIP codes — and much more information — at the point of sale … adding ZIP code information is not a big lift," the release said.
