Major Retailers Formally Oppose Swipe Fee Settlement
The National Retail Federation and 19 large retailers, including WalMart, Costco, Gap, Lowe’s, Nike and Starbucks are choosing not to participate in the pending $7.2 billion class-action settlement with Visa and MasterCard over interchange fees. These retailers will be forfeiting their share of this monetary settlement.
The retailers are opposing the settlement because they feel it won’t keep swipe fees from increasing in the future. In addition, if they participate in the settlement, they would be restricted from taking any future legal action for anti-competitive behavior.
The proposed agreement was reached in July 2012 when MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anti-competitive practices and price fixing in payment processing. In addition, credit card companies agreed to reduce swipe fees for eight months, an adjustment valued at $1.2 billion.
Retailers have until May 28 to opt out of the proposed settlement. The terms of the proposed settlement says that retailers who do not opt out by the deadline will automatically be considered to accept the settlement. Those who accept the settlement are eligible for a share of the settlement but must give up the right to file future lawsuits over the fees and other restrictive rules.
The NRF says this amount is less than three months’ worth of swipe fee charges, and the small retailers hit hardest by the fees would give up their rights for as little as a few hundred dollars.
“The proposed settlement does nothing to bring swipe fees under control and would give Visa and MasterCard a legal blessing to continue their abuse of merchants and consumers indefinitely,” NRF Senior Vice President and General Counsel Mallory Duncan said in a statement. “No settlement at all would be better than this one-sided ‘agreement’ written by the card companies for the card companies that would tie retailers’ hands for decades to come.”
A hearing on final approval is scheduled for September 12.