N.J. man sues Foot Locker over gift-card fees

NEWARK, N.J. - A New Jersey man is taking on athletic-apparel giant Foot Locker over the store's gift-card policies, charging in court papers that they violate the state's consumer laws.

In a lawsuit filed in late August in Middlesex County, Sayreville resident Joseph Vona contends that Foot Locker's use of a so-called dormancy fee - a small fee charged to the card if it has not been used for a period of time - is contrary to a state law passed in 2006 under the Consumer Fraud Act.

Attorneys representing Foot Locker filed last week to have the case moved from Superior Court to U.S. District Court.

Vona is seeking class-action status for anyone who bought a gift card for purchases at Foot Locker or one of its subsidiaries: Lady Foot Locker, Kids Foot Locker, and Champs Sports.

According to court filings, Foot Locker estimated that it has sold about 50,000 gift cards in New Jersey since April 2006, when it instituted its policy of charging a fee against the remaining value of the cards if they were unused for 12 consecutive months.

Vona purchased his $25 card from a Pathmark supermarket in Middlesex County in April 2007.

Among the terms and conditions on the back of the card - which was photocopied for the court filing - Foot Locker states it can deduct a service fee of $1.50 per month from the value of the card for non-use after 12 consecutive months.

The statement adds that the terms and conditions cannot be changed "except when legally required."

"We believe it's a fairly straightforward case," said Andrew Wolf, an attorney representing Vona. "We feel we have a good claim."

Vona did not return a telephone message yesterday.

Many states have imposed limits on dormancy fees or banned them. New Jersey's Gift Card Act prohibits companies from charging the fees until 24 months have passed between purchases and limits the fees to $2 per month.

The statute also requires notice of any fees to be written on the card or receipt in 10-point type or larger, a requirement Vona claims Foot Locker violated by using type that was significantly smaller.

A message left for a Foot Locker spokesman was not returned yesterday, and Robert Leonard, an attorney representing the company, declined to comment on the case, citing company policy.