Kmart Settles Charges Over Gift Cards

Kmart Corporation has agreed to settle Federal Trade Commission (FTC) charges that it engaged in deceptive practices in advertising and selling its Kmart gift card, according to an FTC announcement. As part of the settlement, Kmart will implement a refund program and publicize it on its Web site. This is the FTC's first law enforcement action involving gift cards. According to the FTC complaint, Kmart promoted the card as equivalent to cash but failed to disclose that fees are assessed after two years of non-use, and misrepresented that the card would never expire. Kmart has agreed to disclose the fees prominently in future advertising and on the front of the gift card.

• FTC Press Release
• Consumer Action Handbook (FindLaw)