Reed Smith Client Alerts

The New Jersey Appellate Division recently ordered New Jersey to refund more than $1 million to Bed Bath & Beyond for over-reporting store credits redeemable for merchandise to the state’s Unclaimed Property Administration (UPA). The court clarified that credits redeemable for merchandise only were not reportable at all to the UPA to the extent issued before July 1, 2010. Further, any such credits issued after that date were to be remitted at 60% of their face value. If your business made retail sales and reported any unclaimed store credits to the UPA at 100% value, it may be entitled to a refund, with interest.

Statutory Background

New Jersey’s Uniform Unclaimed Property Act requires holders of unclaimed property to file an annual report with the UPA and remit the unclaimed property to the state.1 “Property” under the Act is presumed abandoned after three years.2 Before the 2010 Amendments, “property” included “credit memoranda.”3
After the 2010 Amendments, “property” now also includes “stored value cards.”4 Such property is presumed abandoned after five years and only “60% of the value of the card” is presumed abandoned.5