Newark, N.J. The Associated Press reported Monday that a class-action lawsuit was filed against Foot Locker for use of dormancy fees on gift cards.
A dormancy fee is when the retailer charges the consumer a nominal fee over a period of time when the card is not used. According to the AP report, this is contrary to a 2006 New Jersey state law.
Reportedly, Foot Locker instituted the dormancy fee in April 2006 against the unused value of gift cards not used for 12 consecutive months.
The New Jersey man who brought the suit, Joseph Vona, purchased a $25 gift card for Foot Locker at a supermarket in April 2007.
Additionally, AP reported court filings included a photocopy of the terms and conditions printed on the back of the gift card, which stated that Foot Locker could deduct a $1.50 service fee per month.
In New Jersey, companies are prohibited from charging gift-card fees until 24 months after the date of purchase and fees are limited to $2.00 per month.