AmEx ends annoying gift card fees

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NEW YORK (CNNMoney.com) -- American Express will stop deducting monthly fees on gift cards that go unused after a push from complaining customers, the company announced Wednesday.

The change will go into effect immediately, including for gift cards already purchased by consumers. American Express (AXP, Fortune 500) previously deducted $2 each month a year after an active gift card went unused from the card's value.

"Customers told us that monthly fees undermine the value of gift cards, plain and simple," said Alpesh Chokschi, president of the global prepaid unit, in a statement, which said American Express is now the only issuer of universal gift cards to eliminate all fees after purchase.

The New York based credit card company's move follows a credit card law that passed earlier this year prohibiting dormancy fees on gift cards, unless they have been inactive for more than a year. The law is set to go into effect in August 2010.

American Express introduced its gift card in 2004 and says business is "robust and growing" with sales exceeding $1 billion annually.

The company will continue to charge an upfront fee ranging from $2.95 to $6.95 on the "general purpose" gift cards worth between $25 and $500. If lost or stolen, the company replaces the cards, which can be redeemed at U.S. retailers and restuarants that accept American Express cards, at no additional cost.

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