The card issuer previously deducted USD 2 each month a year from the cards value after an active gift card went unused. According to company representatives cited by Washington Post, the credit card issuer`s decision to slash the monthly fee on unused gift cards is not a response to the Credit Card Accountability Responsibility and Disclosure Act of 2009 which will take effect in August 2010 and which prohibits gift cards from expiring for the first five years. Such a move is a reaction to customers complaints according to which monthly fees undermine the value of gift cards. The company will continue to charge a fee ranging from USD 2.95 to USD 6.95 on the general purpose gift cards available in denominations between USD 25 and USD 500.
American Express gift cards were introduced in 2004 and they are now available at more than 70,000 outlets including banks, supermarkets and shopping centers. The company has also announced that it will be the main provider of gift cards for Simon Property Groups malls and outlet centres, as part of an expanded agreement between the two parties. Until now, Simon Property Group has sold 41 million cards as part of its Simon Giftcard program.
Editors notes: These are strategic moves to undermine market competition: on the one hand, AmEx partners Simon Property Group, which is known for its line of cobranded Visa gift cards campaigns, and on the other hand, it cuts gift card fees to set sights on a bigger share of the gift card market. Will its competitors do the same?
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