Desperately Seeking Tax Revenue, New Jersey Stoops To Stealing Gift Card Balances

First off, it must be pointed out just what a ridiculously bad deal gift cards are. By paying, say, $5 extra to purchase a $100 card, the buyer is basically handing free money right over to whatever company issued the card. So they were already not the smartest purchase a person could make, and if the State of New Jersey persists in its latest nefarious tax collection scheme, it's about to get a whole lot worse. Here is Huffington Post Money with the details:

Like many states on the hunt to fill in budget shortfalls, New Jersey is getting creative. The state is making a grab for its residents' gift cards.

If you live in New Jersey and wait more than two years to cash in on that Red Lobster gift card that your boss gave you, you'll be out of luck. Under a new state law, New Jersey will take control of funds on gift cards that have not been used for two years. The law could potentially translate into millions of dollars for the Garden State, which would hold the gift card money as "unclaimed funds." That means New Jersey will keep that money in state coffers rather than a consumer being able to access it through the card.

But gift card makers, unwilling to part with so much money in unredeemed funds, are fighting back, pulling out their wares from the state altogether. On Thursday, Blackhawk Network and InComm, the companies behind hundreds of major name-brand gift cards sold through thousands of vendors, said they are pulling their cards from New Jersey vendors starting on June 30 if not sooner. Earlier this week, American Express pulled its cards from New Jersey retailers.

The new law would make card sellers responsible for gathering from buyers certain personal information, such as a ZIP code. That information would then be used by New Jersey to collect the unused money on the cards into the state's unclaimed money fund 24 months after the last time these cards were used.

There are a couple of issues to consider here. First there is the invasion of privacy aspect of collecting customers' personal information. But that seems to be pretty much par for the course in America these days. Corporations and the government continually push the limits in that area, and as long as the vast majority of the public remains completely asleep at the switch about it, nothing is going to even put the brakes on that particular trend.

But more importantly, exactly what justification is there for this method of tax collection? It is so completely arbitrary as to have the appearance of out-and-out theft. Don't get me wrong, I am not an anti-tax reactionary. Government needs money to operate, and taxes are the price people pay for living in any society. But those taxes should be fairly and equitably assessed and there should at least be some articulable justification for them. This asshole move fails on both counts.

Heaven forbid that the Garden State might consider a more just and equitable tax to try and make up its budget shortfall, like maybe one on all of those financial sector scumbags who live in the state. Taxing a fucking asshole banker just for BEING a fucking asshole banker is every bit as arbitrary as confiscating people's gift card balances. And you know that one of the reasons this odious law passed is that millionaire bankers don't buy $100 Best Buy gift cards.

But wait, the state might argue, this action isn't REALLY theft because we have provided a fail safe:

Procrastinating residents could still obtain any remaining balances on the gift cards by contacting the state's unclaimed funds office.

Oh yes, that is just what I would want to do if my gift card balance got confiscated, wrestle with the state government's Orwellian bureaucracy trying to get my $100 back. How much do you want to bet that the office that would field calls about such inquiries will have the biggest nightmare of an automated telephone answering system ever installed in any government office? If you are ready to abandon all hope, please press 7.

But who is ultimately responsible for this abomination? Why, you are of course. And by "you," I mean the average dumbass American consumer:

Under federal law, gift cards must be usable for at least five years after purchase, though most do not have any expiration date. Consumer advocates have criticized gift cards because consumers often forget about them or leave balances unused.

Redemption rates are low for cards and as much as $41 billion in the United States went unspent on all gift cards from 2005 to 2011. In some cases, activation or dormancy fees can eat up small amounts of money left on cards. All these things have made them lucrative for card makers.

It kind of makes you wonder why stores even bother charging the $5 purchase fee in the first place, doesn't it? You would think that sales of the cards, and hence profitable unredeemed balances, would be even higher if they just gave them out for free.

What can you say about a society which is so wealthy yet addle-minded that its citizens can afford to piss $41 billion down the sewer for nothing? There are whole countries out there that don't have a GDP that large. To put that number in perspective, it equals over $100 for every man, woman and child in America. That means the average family of four has put over $400 onto unused gift cards and have just forgotten about them. No wonder so few people get upset and protest moves like one. It's not like they even noticed just how blatantly they were getting ripped off in the first place.


Bonus: The gift

Verizon lays off 336 N.J. Workers Because of Dropoff in Copper Line Customers

Still cleaning out the mass layoffs backlog. This one from last week was reported by New Jersey.com:

Verizon will lay off 336 New Jersey workers from jobs maintaining traditional copper wire networks because of dwindling demand for landline phones, the company said today.

"A little more than 10 years ago, Verizon served between 6.7 to 6.8 million phone lines in New Jersey," said Verizon spokesman Lee Gierczynski in an interview. "Today, the company serves 2.5 million phone lines, so the business has seen a dramatic drop...this is how the telecommunications industry has evolved in the last 10 years."

The workers, based in Boonton, Plainfield, Freehold, Ewing and Egg Harbor, will be cut from the payroll in the next 21 to 60 days. After the move only 20 employees will remain in the Verizon Connected Solutions unit, which worked on the company’s copper line network, Gierczynski said.

Not really a whole lot you can say about this one except that it would suck to be a copper line telecommunications specialist in today's wireless world.


Bonus: From a once ultra hip band, this song is now a throwback to another place and time

Wave of the Future: Everyone's a Temp

With the huge waves of unemployment that have struck the American economy these past few years, and the ongoing off-shoring of jobs overseas, the next logical step in destroying the already frayed job security of American workers would be to make everyone reapply for their own jobs every few years. In other words, make everyone a temp. Sadly, as reported by NPR this week, the idea is already being test driven by an Atlantic City casino:

A new casino set to open in Atlantic City, N.J., has announced it will set term limits for its front-line staff. When employees' terms run out, they'll have to go through the hiring process again. The casino says the policy will keep its service fresh. Others say the company is taking advantage of a tough job market.

From bellhops to dealers, employees of the new casino — called Revel — will be hired for terms from four to six years. After that, they have to reapply for their jobs and compete against other candidates.

Revel declined to make anyone available for an interview. In a written statement, the company asserts that its employment policy will help it "attract the most highly professional people who are inspired by a highly competitive work environment."

But it's an unusual way to go. Many who work in employment law or advocacy say they've never heard of anything like this before.

"What they've done here is set up a system that puts their good performers through a gauntlet of having to compete with people who have no record of performance," says Alice Ballard, a prominent employment attorney who works out of Philadelphia.

The motivation for the company to do such a thing really isn't so hard to spot:

Ballard thinks that "other reason" is probably age. To her, this reapplication process looks like a low-profile way for the casino to regularly weed out older employees.

And thus hold down wages in addition to not having to pay the higher medical costs that inevitably come with a more experienced work force.

At least one worker recognized what a social disaster it would be if this practice every became widespread:

"How can you buy a car if you don't know you're going to have a job?" Payne asks. "You want to refinance your home; you want to buy a home. I mean, these have always been decent jobs, good-paying jobs, sustaining jobs. But my concern is, you get this job — and then you have no job security."

But nevertheless, he expects there will be plenty of applicants:

Payne, a union member, says the new jobs aren't what were promised when gaming came to Atlantic City.

But a lot of people laid off from casinos in Atlantic City in the past few years still haven't found work. He says that even with Revel's tough hiring policy, those people probably will apply.

There's a cliched phrase in sportscasting that is appropriate here: "The Future is NOW!" In that spirit, welcome to the new dystopia.


Bonus: The trouble isn't busing in from out of state anymore...it's already in Atlantic City

ConocoPhillips Refinery Shutting Down; 600 Employees Losing Their Jobs

There have been so many mass layoff stories appearing in the past few days that I am going to have a rare four-post day today. Much as it might clutter up the blog, I think it's important to document these articles.

Remember just a few days ago in his SOTU speech how President Hopey-Changey claimed that the U.S. is producing more oil than it has in eight years? Well, if that is an accurate portrayal of our current energy situation, why is a New Jersey refinery shutting down and laying off so many workers? Here is CBS News with the details:

At New English Style Pizza in Marcus Hook, Joe Salters enjoys a soda and slice of pizza as employees conduct business as usual, for now.

Layoff notices went out for Thursday and Friday at the ConocoPhillips Refinery in nearby Trainer.

“Officially we are finished work by the 31st of January,” said Dennis Stephano, President of the Steelworkers Local Union. He says not only are 190 union members at the refinery losing their jobs, but management and contractors too. He says the total comes to about 600 layoffs.

And let's not lose sight of the bigger picture:

“The consumers in the U.S. are going to be impacted by this, this summer. In the winter, heating oil is going to go up, gasoline, jet fuel,” said Stephano.

Conoco Phillips announced on January 25th earnings of $3.4 billion in the fourth quarter of 2011 compared to $2 billion in the same quarter in 2010. Stephano questions the closing despite the company’s announcement in September that it would close this March if a buyer for the site wasn’t found. Workers knew then layoffs would come now says Stephano. He says they will be paid through March according to the union contract and given one weeks pay per year of service capped at 16 weeks.

With Sunoco closing refineries in Marcus Hook and potentially Philadelphia, US Senator Bob Casey is pressing both companies for more information.

“We’re asking them to do what they should do, be concerned about the region, energy markets, and consumers, not only about some bottom line,” said Casey.

Well, Senator Casey, thanks to 30 years of craven politicos like you bowing and scraping before them, they don't have to be concerned about anything BUT the bottom line. They know that it is going to cost a lot of money to upgrade and maintain aging refineries, even though there is going to be far less oil available for them to refine in the future. They may be heartless, but they aren't stupid.

States Doubling Down on Bad Gambling Bets

I've posted several stories here on TDS about recent decline of the gaming gambling industry in the United States as the throngs who used to fill the casinos find themselves unable to come up cash to throw away on the slots or at the Blackjack table. And yet despite all of the evidence that the industry is in deep trouble and no longer the cash cow it used top be, there are still plenty of localities lining up, hoping to boost tax revenues by overcoming their previous resistance to legalizing gambling and opening casinos of their own. MSNBC has the details:

A Malaysian company's plan to build a $4 billion convention center and big-time casino on the outskirts of New York City could be the biggest shot fired yet in a tourism arms race that has seen a growing number of Eastern states embrace gambling as a way to lure visitors and drum up revenue.

New York Gov. Andrew Cuomo announced last week that he would work with the Genting Group, one of the world's largest and most successful gambling companies, to transform the storied, but sleepy, Aqueduct horse track into a megaplex that would eventually include the nation's largest convention center, 3,000 hotel rooms, and a major expansion of a casino that began operating at the site in October.

The proposal came less than two months after once-puritanical Massachusetts passed a law allowing up to three resort casinos, plus a slot machine parlor, at locations around the state.

Ohio is poised to see its first commercial casinos open this year, after voters approved up to four gambling halls in 2009. Maryland's first casino opened last year, with more on the way. Pennsylvania's first casinos opened in 2006, and already the state is threatening to surpass Atlantic City as the nation's second-largest gambling market.

And in Florida, lawmakers are hotly debating a whopper of a bill that would allow up to three multibillion-dollar casinos, plus additional slot machines at dog and horse tracks. Genting appears confident the law will pass. It has already spent around $450 million to acquire waterfront property in Miami, where it wants to build a $3.8 billion complex that would include a casino, dozens of restaurants and a shopping mall.

States have embraced casinos, after years of trepidation about their societal costs, for two simple reasons: a promise of a rich new revenue source, plus the possibility of stimulating tourism.

The article itself actually does a very good job of raising questions as to whether this latest desperate revenue grab by the state governments is at all advisable:

Some experts, however, have questioned whether revenue bonanzas that large are realistic, and say states should be cautious about giving up too much to lure these projects. Competition for a limited pool of gambling and tourism dollars is already fierce, and recent years haven't been kind to casinos.

Nevada's larger casinos lost $4 billion in 2011, according to a report released this month by the state's Gaming Control Board, as the state continued to feel the effects of the global economic slump.

As gambling options have increased in the East, revenue has slid substantially at the pair of Indian tribe-owned casinos in Connecticut and declined by a dramatic 30 percent in Atlantic City, which has lost customers in droves to the new casinos in nearby Philadelphia, according to David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas.

So the latest players in the legalized gambling game plan to spend billions of dollars to spread the wealth that much thinner even as the slowly collapsing economy continues to squeeze the mass of players suckers they need to be able to make a profit.

How much more proof do you need that the so-called "leaders" of our society are completely out of ideas and have resorted to merely shuffling the deck chairs on the titanic?


Bonus: Wait a minute, is that music I hear on the promenade deck?