American Express Cuts Monthly Fees on Gift Cards Permanently

Gallery.shopIn a move that will force the hand of its competitors this holiday season and beyond, American Express has elmininated montly fees on its gift cards, permanently.
It is the first gift card issuer to wipe out all fees after purchase. American Express gift cards are available at more than 70,000 outlets such as supermarkets, drugstores, shopping centers and malls, banks and American Express Travel Service offices, as well as online.
The landmark move by American Express goes further than the gift card fees provision of the credit card reform, which is to take effect within months. The new law would only limit fees on gift cards, but not eliminate them. Congress prohibited inactivity fees or monthly service charges on gift cards for the first year after purchase.
American Express began selling gift cards five years ago, and it now sells more than $1 billion worth of cards a year.
“Customers told us that monthly fees undermine the value of gift cards, plain and simple,” said Alpesh Chokshi, president of Global Prepaid, American Express. “We believe this sets a new gold standard among gift cards and provides a win for consumers and our business. With today’s announcement, recipients now have a gift card that’s 100% gift, 0% fees.”
In addition, American Express and Simon Property Group, Inc. announced a new, expanded relationship that makes American Express the primary provider of Simon gift cards. Simon Property Group owns several U.S. regional malls, and is a pioneer of universal gift cards, selling more than 41 million cards.
“The elimination of monthly fees on the American Express/Simon Giftcard will be a major differentiator in the marketplace and will drive our growth this season and beyond,” said Mikael Thygesen, chief marketing officer, Simon Property Group.

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