Consumer advocates have long been critical of gift cards that carry hefty fees and expire without warning, leaving you with a worthless hunk of plastic when you find a card in your sock drawer two years after receiving it. American Express, until now a culprit when it comes to fees, has just ditched the $2 monthly charge recipients had to pay for the privilege of keeping a card for more than a year. Unfortunately, buyers of Amex gift cards will still be saddled with upfront fees ranging from $2.95 to $5.95 per card.
Amex’s move puts it ahead of competitors for now, though most card issuers will have to offer similar policies by next year, when the gift card provisions of the credit card act go into effect. That law will still allow card issuers to charge “dormancy” fees, but only after a card has been unused for 12 months.
Amex, not surprisingly, is touting the consumer benefits of its new policy and downplaying the regulatory aspects:
“We think this is great for the consumer. It’s great for the industry. It’s right for the times,” said Amex’s Alpesh Chokshi. “It’s not being driven by Washington. “What we’re doing here is going far, far beyond that and saying there will never be monthly fees.”
Chokshi didn’t have much to say about buyers of gift cards, who will still have to pay upfront fees. But at least if you receive an Amex gift card and find it in the sock drawer five years from now, you’ll still be able to use it.
American Express Drops Fees on Gift Cards [Washington Post]