Consumer Payment Card News

Gift Card Settlement

Another retail gift card issuer has agreed to settle Federal Trade Commission charges that it engaged in deceptive practices in advertising and selling its cards. Darden Restaurants, which owns restaurant chains Olive Garden, Red Lobster, Smokey Bones, and Bahama Breeze, became the FTC’s second law enforcement action involving gift cards. Last month, Kmart agreed to settle FTC charges that it engaged in deceptive practices in advertising and selling its gift cards. Darden has agreed to restore fees that were deducted from consumers’ gift cards and disclose fees or expiration dates in future gift card sales. For cards sold before February 2004, after 15 months of non-use, a $1.50 dormancy fee was deducted from the card’s balance for each month of inactivity; for cards sold after February 2004, the monthly fee was deducted after 24 months of non-use. As of October 2006, Darden stopped charging a dormancy fee on all Darden gift cards. For more information, visit: “http://www.ftc.gov/”:http://www.ftc.gov/

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