Gift Cards And Promotions Under New Jersey Law

Gift Cards And Promotions Under New Jersey Law

Gift cards are a reliable holiday tool for both retailers and restaurants, but the law in New Jersey is specific and layered. Federal rules set a floor. State statutes add disclosures, cash-out rights, fee limits, and unclaimed property obligations. A business that sells or accepts gift cards in November and December should check the fine print now, not after a customer or regulator raises a concern.

Expiration, Fee Limits, And Required Disclosures

New Jersey bars expiration of the underlying funds during the first twenty four months and prohibits dormancy fees during that same period. If a dormancy fee is charged later, it cannot exceed two dollars per month. The statute also requires clear disclosure in at least ten point type on the card, packaging, or sales receipt, and a phone number for consumers to obtain fee or expiration information. These are enforceable obligations under the Consumer Fraud Act. 

Federal law then extends the consumer protection timeline. Under the Credit CARD Act and its regulation, most gift cards cannot expire for at least five years, and inactivity fees are restricted. Retailers should view five years as the operative federal floor even where a form references an earlier date. 

Cash-Out Of Small Balances At The Register

If a customer redeems a card and less than five dollars remains, New Jersey requires cash redemption on request for most store-issued cards. The statute provides penalties for noncompliance and lists narrow exceptions, such as certain multi-merchant network cards, nonreloadable cards initially sold for five dollars or less, and cards issued in lieu of a refund. Train cashiers now and post a register procedure so the team handles these requests consistently.

Stored Value Cards, Fund Validity, And Fee Rules After 2012

For stored value cards sold on or after December 1, 2012, state law is explicit that the funds remain valid until redemption. The physical card may carry a printed date consistent with federal rules, but the money does not expire. The same statute restricts fees on these cards to activation, load, and replacement charges if those charges are disclosed in writing. General purpose reloadable bank cards are treated separately. Confirm which category your product fits before relying on any fee schedule in older packaging.

Promotional, Rewards, And Event-Linked Cards

Not every instrument is a “gift card” under New Jersey law. Rewards or promotional certificates distributed without direct payment by the consumer sit in a different bucket and are excluded from the stored value escheat rules. Advertising rules still apply. Any offer of a gift, free item, or bonus must state material terms, including when the bonus is earned and when it will be delivered, and sellers must honor those terms. Treat the promotional headline and the asterisk text with equal care because regulators do the same. 

Unclaimed Property: Five-Year Dormancy And Reporting

New Jersey presumes a stored value card abandoned after five years with important exceptions for small issuers and certain charitable or event-linked cards. For most issuers, the amount reportable is a percentage of the face value if the card is not a reloadable bank product. Retailers that sell large volumes should have a calendar and a reporting workflow through the Treasurer’s unclaimed property process. This is not optional bookkeeping. It is a statutory obligation with audit exposure.

Practical Contracting And Policy Steps Before Holiday Sales

Standardize card terms to reflect both New Jersey and federal rules. Place the ten point disclosures on the card or the receipt and include a working customer service number. Program your point-of-sale to flag cash-out eligibility for sub five dollar balances. Train staff on when to issue cash rather than store credit. Map your catalog of instruments by type, since a house gift card, a promotional reward, and a network-branded bank card follow different rules. Align your unclaimed property calendar with the five-year dormancy window and document the handoff from finance to compliance.

Why This Matters In Litigation And Enforcement

Gift card disputes surface as consumer fraud claims, class actions, and unclaimed property audits. Plaintiffs focus on undisclosed fees, premature expirations, and refusal to cash out small balances. The State focuses on disclosure failures and late reporting. Statutory text controls these cases. Written compliance, register procedures, and accurate disclosures are the best defense when a demand arrives. 

For more information about your legal rights or to schedule a consultation, please contact the Law Offices of Peter J. Lamont at www.pjlesq.com, call 201-904-2211, or email info@pjlesq.com.

Contact us today to discuss your business or legal matter. Put our 20+ years of legal experience to work for you.

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For detailed insights and legal assistance on topics discussed in this post, including litigation, contact the Law Offices of Peter J. Lamont at our Bergen County Office. We're here to answer your questions and provide legal advice. Contact us at (201) 904-2211 or email us at  info@pjlesq.com.

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About Peter J. Lamont, Esq.

Peter J. Lamont is a nationally recognized attorney with significant experience in business, contract, litigation, and real estate law. With over two decades of legal practice, he has represented a wide array of businesses, including large international corporations. Peter is known for his practical legal and business advice, prioritizing efficient and cost-effective solutions for his clients.

Peter has an Avvo 10.0 Rating and has been acknowledged as one of America's Most Honored Lawyers since 2011. 201 Magazine and Lawyers of Distinction have also recognized him for being one of the top business and litigation attorneys in New Jersey. His commitment to his clients and the legal community is further evidenced by his active role as a speaker, lecturer, and published author in various legal and business publications.

As the founder of the Law Offices of Peter J. Lamont, Peter brings his Wall Street experience and client-focused approach to New Jersey, offering personalized legal services that align with each client's unique needs and goals​.

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