Kathy Wiedeman of Fishers, Indiana was angry when her daughter was unable to use her Simon Mall Gift Card. "It was a gift to my daughter from her aunt. She tried to use the card in July but it was denied so she gave it to me a few months later, saying it didn't work," says Wiedeman.
The clerks at the Hollister clothing store, where her daughter unsucessfully tried to use the card, also tried to use it for Wiedeman's daughter, with no luck.
"I got online to see what was going on with it. Each month [Simon Mall Gift Cards] had been deducting $2.50 while the card was not being used. I found out that after these deductions the card was only worth a few dollars," says Wiederman. " I got hold of the company and they said they would give half back from what they already deducted." Wiedeman said thanks but no thanks. "I want it all back."
Consumer Affairs announced that a lawsuit had been settled in New York. Simon Property Group Inc. agreed to comply with New York's gift card law.
The suit said that "a monthly administrative fee on gift cards purchased after October 18th, 2004 violates the state law that bans monthly service fees on gift cards until the card has been unused for twelve full months.
Simon violated another provision of the law by assessing a $5 fee to replace a lost or stolen gift card without conspicuously disclosing that fee on the gift card itself.
At its shopping malls and on its [website], Simon promotes and sells pre-paid gift cards. It charges a fee of $1.50 for each card if purchased at its malls or $5.95 for "shipping and handling" if purchased on the Internet.
In addition, Simon charges a $2.50 monthly "administrative" fee commencing in the seventh month after purchase; a 50 cent fee for each telephone balance inquiry; a $5 fee to reissue a lost or stolen gift card; and a $7.50 fee to reissue an expired card.
That's a whole lot of fine print.
Wiedeman and her friends have several Simon Mall Gift Cards that they either purchased or were given as gifts over the past six months. They are all sitting in their "junk drawers" or posted on their "things to do" board -- to return.
Hold onto those cards - you may get compensation.
As part of the settlement, Simon has agreed to pay the state of New York $100,000 in penalties and $25,000 in costs.