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A consumer who purchased an American Express Co. gift card filed a lawsuit earlier this summer against AmEx alleging the issuer does not fully disclose card terms and conditions, which he says are posted inside card packaging and are not accessible until after a card is purchased. The plaintiff also alleges consumers cannot use small balances left on the cards because, the lawsuit says, all retailers refuse to accept gift cards in split-tender transactions. Consumers make split-tender transactions when they use more than one form of payment in a single purchase. J.L. Goodman filed the suit in the U.S. District Court, Eastern District of New York, in June. Goodman wants the case certified as a class action that includes everyone who has purchased an AmEx gift card. He is seeking monetary damages equal to the amount of unused funds on all gifts cards, plus interest, attorney's fees and monetary damages equal to profits earned on the unused funds. Rob Sherman, an AmEx spokesperson, tells CardLine he cannot comment on the case itself. However, AmEx expects all merchants accepting the company's gift cards to accommodate split-tender transactions, Sherman says. AmEx has run advertisements and has conducted a media campaign encouraging consumers to use their gift cards quickly and to keep track of their balances to avoid problems with split-tender transactions, he says. A consumer who hands a cashier a gift card with a $5 balance for a $5.50 transaction may have the card declined if the clerk is not trained to handle split-tender transactions, Sherman says. For the past several years, AmEx has been upgrading merchant point-of-sale software to make partial authorizations of gift cards easier by enabling sales clerks to see balances remaining on cards, Sherman says.
