Kmart to Refund Gift Card Fees
Kmart Corporation will reimburse dormancy fees charged on gift cards as part of its settlement with the FTC. The FTC filed a complaint that charges Kmart with deceptive practices in the advertising and selling of the cards.
According to the FTC, Kmart charged a dormancy fee of $2.10 for each month the card was not used after 24 months. If not used for two years, the dormancy fees would be $50.40. Kmart also advertised that the gift cards would never expire, but dormancy fees could quickly eat up the balance of a card and in the case of those with a value under $50.40, the card could become worthless in two years if not used. Kmart stopped charging dormancy fees after May 1, 2006.
The proposed settlement requires Kmart to reimburse the dormancy fees for consumers who provide an affected gift card’s number, a mailing address, and a telephone number. Kmart will publicize the refund program on its Web site, including a toll-free number, e-mail address, and a postal address for eligible consumers to contact Kmart to seek a refund.
The FTC has established a Consumer Hotline at (202) 326-3569 for consumers who have questions about the refund program. The Hotline will be updated as necessary.
Good! Dormacy fees are such a rip off. When people get a gift card that is “good as cash” and they don’t have an expiration date, people should not be losing the value on it.
By Janus on March 14th, 2007 at 12:04 pm
It doesn’t really make sense for a cash card to have an expiration date, considering that the longer one takes to redeem it, the more money the retailer is likely to make because, let’s face it, prices rarely go down.
By Andrea on March 14th, 2007 at 9:15 pm