Gift Card Alert: Third Circuit Confirms States Can Audit Gift Card Subsidiaries, but Emphasizes Limits

Retail Did You Know?

January 30, 2018

Many retailers with gift card programs have faced or may someday face a lengthy and onerous unclaimed property audit by a state government, even if the gift card balances are not escheatable to that state. A recent decision by the US Court of Appeals for the Third Circuit confirmed that there are limits to states’ ability to audit retailers’ gift card programs. This edition of Morgan Lewis Retail Did You Know? examines the recent Third Circuit ruling in Marathon Oil v. State of Delaware, including some of the ways it can be used to help limit the scope of these audits and how it may impact retailers with gift card programs more broadly.