American Express Co. said Wednesday that it will eliminate fees deducted from gift cards that go unused as it pursues a bigger share of an estimated $25 billion market this holiday season.
By allowing cards to retain value indefinitely, the New York financial company is going beyond U.S. rules set to take effect in August that forbid "dormancy" fees for at least one year.
Amex will continue charging people $2.95 to $6.95 to purchase cards worth $25 to $500, said Alpesh Chokshi, the president of Amex's global prepaid unit.
"This will make us the only major issuer of universal or general-purpose gift cards with no fees at all after purchase," Chokshi said in an interview.
Amex dropped the dormancy fee after consumer complaints and because the business, which the company entered in 2004, exceeds $1 billion in annual sales, Chokshi said.
"We've got the cost structure down enough that we can actually take this revenue item out," he said.
