The gift cards in question were sold by Foot Locker, Kids Foot Locker, Lady Foot Locker, and Champs Sports. The dormancy fee at issue is a $1.50 per month charge that was assessed on the cards following an initial 12-month period of possession of the card. The settlement excludes any card holder who bought a gift card that was sold without the paper sleeve for promotional purposes. The action does not allege that the dormancy fees in themselves are illegal under New York law, but that the company's failure to inform consumers was a violation.

Under the proposed settlement, Foot Locker will maintain a toll-free settlement phone number--(866) 216-0283--for 120 days through which cardholders may make claims. The phone number will operate from 9 a.m. to 5 p.m. Central time, Monday through Friday, excluding holidays.

The settlement provides the following benefits: (1) those cards that have not yet been assessed a dormancy fee will be honored at full face value for an additional four months; (2) if a dormancy fee has been assessed, Foot Locker will give the cardholder a store credit, in the form of a gift certificate that will retain its full face value for 12 months, valued at 75% of the previously assessed dormancy fee plus any remaining value on the original gift card; and (3) all automatic expiration dates will be voided, though dormancy fees as allowed by the settlement will still be operative.

Proof of a valid claim may be submitted by providing the actual gift card in question, a receipt for the purchase of a gift card, or a receipt for a purchase made with a gift card. Foot Locker will ascertain whether the claimant was actually a cardholder by verifying the card number, which is printed on the card and receipts for the purchase and utilization of the cards.

The settlement will not be effective until the court grants it final approval. The court has scheduled a hearing on the matter for August 22, 2003.