Major Retailers Opt Out of Proposed Swipe Fee Settlement
NEW YORK -- Nineteen retailers, including 7-Eleven Inc. and Alon Brands Inc., opted out of a proposed class-action settlement with Visa Inc. and MasterCard Inc. one week before a court-imposed deadline to do so.
Wal-Mart Stores Inc., Costco Wholesale Corp., Starbucks Corp., Gap Inc., Lowe's Cos. and Nike Inc. are among the other companies to opt out of the settlement, which would deliver more than $6 billion to as many as 8 million retailers that accept Visa and MasterCard. The proposed settlement also calls for the two credit card purveyors to temporality lower swipe fees -- known as interchange rates -- by as much as $1.2 billion.
The group of 19 retailers opted out because the settlement doesn't prevent the credit card companies from raising swipe fees in the future. In addition, the agreement would prevent retailers from future lawsuits regarding alleged anti-competitive behavior, reported Dow Jones Newswires.
"If this settlement is approved, it would allow credit card companies and big banks to perpetuate an unfair and broken system that costs all consumers, including those who don't even have a credit or debit card," Mike Cook, senior vice president of finance and assistant treasurer for Walmart, said in a statement.
As CSNews Online previously reported, NACS, the Association for Convenience & Fuel Retailing, has vehemently opposed this swipe-fee settlement. In fact, the trade group developed and launched the merchantsobject.com website to voice its criticisms of the proposed deal.
The National Retail Federation has also objected publicly to the settlement terms.
Despite the opposition, Judge John Gleeson of the U.S. District Court in Brooklyn granted preliminary approval to the settlement in November. A hearing on final approval is scheduled for Sept. 12.
"MasterCard is confident that the U.S. District Court for the Eastern District of New York will grant final approval for the U.S. merchant settlement," a spokesman for MasterCard told Dow Jones.