AmEx halts gift card monthly fees as holidays near

SEATTLE (Reuters) - American Express Co said on Wednesday it is getting rid of monthly fees on all its gift cards, attempting to appease holiday shoppers who may worry that their cards will lose value if not used quickly.

American Express said the elimination of monthly fees is effective immediately and includes cards in stores, those yet to be purchased and ones that have already been bought.

The move could be a welcome boost for gift card sales, after a weak showing for the once-popular gift cards in the 2008 holiday shopping season.

Sales of gift cards were forecast to fall nearly 6 percent in last year's holiday period by the National Retail Federation as shoppers were expected to pick discounted merchandise as holiday presents over gift cards.

NRF said it only issues forecasts for gift card spending.

The 2008 holiday season was one of the worst in nearly 40 years by some measures -- turning the spotlight on how things will transpire this year.

Early forecasts for the 2009 holiday season call for sales to be anywhere from up 2 percent to down 1 percent. Consumers are still expected to seek out discounts, putting pressure on retailers to take fresh steps to bolster their revenue.

American Express also said that it will be the primary provider of gift cards for Simon Property Group's malls and outlet centers.

American Express gift cards are available at more than 70,000 stores, the card issuer said in a statement.

(Reporting by Aarthi Sivaraman in Seattle)