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A proposed class-action lawsuit over interchange rates against Visa, MasterCard and their member banks is entering a critical juncture, and convenience stores have important decisions to make, according to attorneys Jeffrey I. Shinder and Matthew L. Cantor.
The interchange case — now in federal court in Brooklyn, N.Y. — involves 20 merchant plaintiffs, including NACS and CHS Inc., who allege the transaction fees they pay for accepting Visa and Mastercard debit and credit cards amount to illegal price-fixing. The merchants have requested class-action status. If the motion is granted, each class member — every merchant that has accepted a Visa or MasterCard payment in the U.S. in recent years — will have to decide whether to become part of the class-action, or opt out and file their own lawsuit.
Shinder and Cantor, partners in the law firm of Constantine Cannon LLP, were the lead counsel, representing a class of 5 million merchants, in the 2003 class- action suit against Visa and MasterCard over their signature debit cards, which delivered more than $2.5 billion in settlement payments. Based on their experience, Shinder and Cantor believe there's a strong chance the presiding judge will certify the class-action.
If the class-action is certified, the lawyers said the parties would either try the case (assuming it is not summarily dismissed before trial) or settle. In any instance, they said convenience store retailers would have to choose one of three strategies:
Wait and hope to collect;
Wait and object to the likely settlement; or,
Opt out completely.
In other interchange news, convenience store operators delivered to Congress 2 million new customer signatures collected during the NACS "Stop Unfair Swipe Fees" campaign, which asked Congress to put an end to unfair, hidden credit and debit card swipe fees that cost Americans $48 billion annually.
U.S. Representative Peter Welch (Vt.-At Large), who along with Rep. Bill Shuster (Pa.), joined the c-store retailers at a NACS press conference in the nation's capital.
NACS Chairman Jay Ricker, CEO of Ricker Oil Co., said it's crazy to think that the credit card companies make more off of most small stores than the owners do. "But that's the case these days," he said. "From coast to coast, convenience stores pay more in fees to the credit card companies than they make in profits each year. Millions of Americans have signed these petitions and urged Congress to take action against unfair swipe fees. It's time for Congress to step up to the plate and fix this broken system."