Opinion ID: 2959935
Heading Depth: 2
Heading Rank: 1

Heading: The Simon Giftcard

Text: SPGGC is a subsidiary of Simon Property Group, Inc., which operates shopping malls in 2 more than thirty states, including Connecticut. The Simon Giftcard, a prepaid, stored-value payment card, is sold in Simon malls, as well as through Simon’s website. At the time SPGGC filed its Second Amended Complaint, the Giftcards were issued by Bank of America, N.A. (“BoA”), a national bank, and operated on the Visa debit card infrastructure. Simon Giftcards – which are similar in size and appearance to credit or debit cards, and carry a Visa logo along with Simon’s name – are accepted by any merchants that accept Visa debit cards. SPGGC acknowledged selling “several thousands of Giftcards each year in Connecticut.” All of SPGGC’s revenue, and any profit, from the Giftcards derives from the fees associated with them. Several such fees are imposed directly on Giftcard purchasers, including “upfront handling/loading fees, [and] potentially applicable maintenance, replacement, and call center fees.” BoA is a Visa member bank, and as such may issue various forms of Visa payment cards. See generally United States v. Visa U.S.A., Inc., 163 F. Supp. 2d 322, 332-33 (S.D.N.Y. 2001) (“Visa I”), aff’d, 344 F.3d 229 (2d Cir. 2003) (“Visa II”). Issuers generally act as “the liaison between the network [i.e., Visa] and the individual cardholder,” and collect an interchange fee each time a transaction is executed. Visa II, 344 F.3d at 235. As a Visa member bank, BoA must adhere to Visa’s bylaws and operating regulations. See Visa I, 163 F. Supp. 2d at 332. Pursuant to its relationship with SPGGC, all Simon Giftcards and cardholder agreements identified BoA as the issuer. The cards themselves were identified as property of BoA. In addition, BoA retained review and approval authority over all terms and conditions for the Giftcards, as well as design of the cards and card carriers with which they were sold. These 3 terms and conditions were uniform across the United States, and, according to SPGGC, were modeled after those used for BoA’s own branded gift cards. They included a $2.50 monthly service fee, to be deducted from any balance remaining on the Giftcard after six months from the date of purchase. In addition, to comply with Visa regulations, all Simon Giftcards carried a oneyear expiration date. According to SPGGC’s complaint, BoA approved these terms.