Lawmakers back signs to combat gift-card scams

Business leaders on Jan. 27 failed to persuade lawmakers to drop a bill requiring stores to warn gift-card buyers about potential fraud.

Assembly bill A-4636 would compel retailers to post information about how the cards can be manipulated and made worthless. Businesses that fail to caution buyers would be subject to $1,000 fines.

The Assembly consumer affairs committee passed the measure 4-2, with Republican members opposed. “Walls are covered with signs, with required paperwork, and additional signage is not going to stop folks from stealing these cards,” Eileen Kane, New Jersey state director of the National Federation of Independent Businesses, told the panel in Trenton. “The problem with card theft is it’s organized crime. Signs are not going to stop organized crime.”

John Holub, president of the New Jersey Retail Merchants Association, said gangs take gift cards off store shelves, manipulate them with software and furtively place them back. When the cards’ legitimate buyers load them with cash, a software trigger drains the value into criminal accounts.

Assemblywoman Annette Quijano, a Democrat from Elizabeth, said the bill would raise shoppers’ awareness. “I know having a sign is not going to stop the problem, but the sign informs the public that there’s a problem, and what to look for,” Quijano said. The measure must be passed by the legislature and signed by the governor to become law.