InComm, following a similar move by American Express, plans to stop selling gift cards in retail stores in New Jersey.
InComm, of Atlanta, said Thursday that it plans to end its gift card mall program in New Jersey due to a state law that would require retailers to collect ZIP codes when the cards are sold. InComm's gift card mall program will end June 30.
"Because InComm is unable on behalf of its third-party gift card partners to ensure compliance with this law, we unfortunately have no choice but to remove all our gift cards and gift card destinations from retail locations in the state of New Jersey," said Brooks Smith, InComm's president and chief executive, in a press release.
Amex (AXP) gave a similar reason for ending gift card sales in New Jersey. It is removing its gift cards from store shelves but still sells the cards online. Amex's decision does not affect its reloadable prepaid cards.
The ZIP code rule is meant to help identify which card purchasers are New Jersey residents. Any unspent balances on a resident's card are to be transferred to the state after the account has been inactive for two years.
"States should not have the right to remove funds from an unexpired gift card," Smith said in the release.
New Jersey said in a press release Wednesday that it is not burdensome for retailers to collect ZIP codes in addition to the other information they typically collect at the point of sale. State residents are allowed to reclaim their unspent funds even after the state has claimed the balances.
InComm's gift card mall program sells gift cards for Apple iTunes, Macy's, Chili's, Subway and others.