Quick Stats

Quick Stats

    You are here

    Retailers File New Swipe Fee Class-Action Suit

    Kwik Trip, RaceTrac, Wawa are among the c-store plaintiffs.

    TYLER, Texas — Swipe fees continue to be a battleground for retailers.

    On May 12, a group of merchants filed a new class-action lawsuit against Visa Inc. and MasterCard Inc., alleging the credit card companies unlawfully restrained competition and forced merchants to pay excessive interchange fees to accept payment from Visa and MasterCard credit and debit cards, according to Top Class Actions.

    This suit is separate from the $5.7-billion class-action settlement reached between retailers and Visa and MasterCard over the companies' swipe fee policies. That settlement was approved in December. 

    This new swipe fee legal challenge alleges Visa and MasterCard have engaged in an illegal conspiracy in violation of federal antitrust laws.

    Convenience store chains Allsup's Convenience Stores Inc., Kwik Trip Inc., RaceTrac Petroleum Inc., QuickChek Corp. and Wawa Inc. signed on as plaintiffs. Other plaintiffs include BSN Sports LLC f/k/a BSN Sports Inc., ADFP Management Inc., Citi Trends Inc. and Waffle House Inc.

    The class-action suit was filed in the U.S. District Court for the Eastern District of Texas, located in Tyler.

    As Top Class Actions reported, the retailers allege that swipe fees — also known as interchange fees — are often one of merchants' biggest operating expenses, and that they collectively have paid hundreds of millions of dollars in the last fiscal year to issuing banks that are Visa and MasterCard members.

    According to the suit, banks have entered into membership agreements with Visa and MasterCard, which prohibit them from competing for merchant acceptance of the credit and debit cards they issue. The class-action lawsuit names Visa Inc., Visa USA Inc., Visa International Service Association, MasterCard Incorporated and MasterCard International Incorporated as defendants.

    "The principal rules that constitute the competitive restraints are the setting of 'default' interchange fees, the Honor All Cards Rules, the All Outlets Rules, the No Discount Rules, and the No Surcharge Rules," the class-action suit alleges. "These rules have precluded merchants from gaining the benefits of competition as to the terms for the acceptance of cards of particular issuing banks, and have precluded card issuers from competing for merchant acceptance of their cards."

    "As a consequence," the suit continues, "the setting of 'default' interchange fees effectively fixes the price of acceptance at a supra-competitive level. Plaintiffs have paid significantly higher costs to accept Visa-branded and MasterCard-branded credit and debit cards than they would if the member banks issuing such cards competed for merchant acceptance."

    The plaintiffs are seeking damages, attorneys' fees, costs of the lawsuit, and pre- and post-judgment interest. They have demanded a jury trial for this swipe fee class-action lawsuit. 

    The plaintiffs are represented by Richard E. Norman of Crowley Norman LLP, Jeffrey J. Angelovich of Nix Patterson & Roach LLP, and William Curtis Webb and Fields Alexander of Beck Redden LLP.

    Related Content

    Related Content