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American Express avoids potential hassles in New Jersey

It sometimes makes sense for businesses operating in New Jersey to avoid legal problems by taking a proactive approach. In anticipation of future problems while going about resolving a business dispute with the state through litigation, American Express no longer markets gift cards through retailers in New Jersey.

Because New Jersey's Treasury Department will soon demand that all merchants collect a zip code from buyers of gift cards, American Express has withdrawn all gift cards from the shelves of pharmacies, convenience stores, and groceries, according to a recent news report.

This move by American Express may be insightful and possibly prevent future litigation. There is already litigation underway, including both American Express and the New Jersey Retail Merchants Association among other groups, against the state regarding the new requirement.

John Holub, president of the New Jersey Retail Merchants Association, is one example of those who believe that this new state requirement creates an administrative burden on the seller of the gift cards.

The sudden focus on the gift cards is all about money for New Jersey. The treasury wants to institute this requirement so that it can make claims for unclaimed property for gift cards not used after two years.

When a business is not sure what actions it should take to comply with new laws such as this upcoming requirement for selling gift cards in New Jersey, there is time to look around for legal advice. It is often more cost-effective to get legal advice when it appears there may be trouble on the horizon rather than after difficulties have made themselves known when defending a business in litigation.

Source: CourierPostOnline.com, "American Express pulls gift cards from N.J.," Angela Delli Santi, April 2, 2012

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