What’s the greatest way to get consumers to buy your product? Stop charging additional fees. American Express has announced today that the company will no longer charge additional monthly fees on unused cards.
“Customerstold 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.
For a company that really listens to its customers this is a strong move. Currently, no other gif card issuer is doing this. Generally store cards do not have an expiration date and most charge no additional fee. American Express does not charge an additional fee if the customer’s gift card is lost or stolen. This is in contrast with Visa gift cards that can charge as much as $2.50 a month a year after the card is issued. To replace a lost card, the cost is $12. American Express charges $2.95-$6.95 per card though last year around the holidays cardholders could purchase Amex gift cards fee free.
This is a definite way to stay competitive.