June 14, 2013 - Nearly 8,000 Merchants Opt Out of One-Sided Swipe Fee Settlement
A broad range of close to 8,000 merchants from across the country have opted out of a proposed lawsuit settlement NRF and others say would do nothing to bring Visa and MasterCard’s credit card swipe fees under control, according to figures released this week.
A total of 7,807 companies met a May 28 deadline to reject the class action settlement, according to Epiq Class Action and Claims Solutions, a private firm handling the paperwork for U.S. District Judge John Gleeson in New York.
While that’s a small percentage of the nation’s total merchants it includes many of the nation’s largest and best-known retailers, representing a large share of credit card volume and showing the depth and breadth of opposition to the settlement. Department stores, luxury retailers, apparel stores, specialty retailers, restaurants and independent stores are among the large cross section of the retail industry included.
Visa CEO Charles Scharf told investors last week that he expected merchants opting out would represent about 25 percent of credit card transactions, the point at which the settlement includes a provision allowing Visa and MasterCard to walk away from the deal. The percentage has not yet been made public.
Jeffrey Shinder, a New York attorney representing some of the merchants fighting the settlement, told Reuters the number of opt outs “powerfully reflects the enormity and diversity of the opposition.”
NRF told the court in a brief that the agreement is a “surrender” to the “evil” of price fixing that should be rejected. The lawsuit argues that the system under which Visa and MasterCard set swipe fees followed by the thousands of banks that issue their cards is a violation of federal antitrust law, but the settlement would leave the system in place.
NRF argued that the settlement would do nothing to reduce swipe fees or keep them from increasing in the future but would require retailers to give up their right to any future legal action over the fees or related card industry rules. The settlement offers retailers $7.25 billion, but the figure amounts to less than three months’ worth of swipe fee charges and small retailers would see as little as a few hundred dollars.
© 2013 National Retail Federation