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NEW YORK -- Retailers still undecided about the $7.25-billion swipe fee settlement on the table have until this Tuesday, May 28, to make a decision.
The settlement would end an eight-year legal battle between retailers and Visa, MasterCard and other financial institutions over credit card interchange fees. The proposed accord between the two sides in the 2005 class-action lawsuit was reached in July.
Now, approximately 8 million merchants have until Tuesday to opt out or object to the deal. Every business of any kind that has accepted a Visa or MasterCard credit or debit card for payment since Jan. 1, 2004 is a member of the class of plaintiffs in this antitrust case.
A fairness hearing to determine whether the settlement should be granted final approval is scheduled for Sept. 12, as CSNews Online previously reported.
Several major retailers -- including 7-Eleven Inc., Alon Brands Inc., Wal-Mart Stores Inc. and Starbucks Corp. -- have opted out. Multiple trade associations – such as NACS, the Association for Convenience & Fuel Retailing and the National Retail Federation -- have also chosen to opt out.
According to NACS, the association is opting out and objecting to the proposed settlement because it does not modify the price-fixing and other anti-competitive activities of the credit card companies and their card-issuing banks.
"While retailers might get a couple of months' worth of their fees back through the settlement, their swipe fees would likely increase by more than the dollars they would receive before they even receive a single penny from the settlement fund," NACS stated. "Worse, the proposed settlement requires class members to release Visa and MasterCard from liability, forever, for any anti-competitive rules currently in place (including the interchange or swipe fee rules) and/or any 'substantially similar rules' instituted at any time in the future."
The case is currently before U.S. District Court Judge John Gleeson presiding in the Eastern District of New York in Brooklyn, N.Y. In November, Gleeson granted preliminary approval to the deal. However, many retailers and industry associations -- including some involved in the original legal action as class plaintiffs, as well as some who aren't -- have been raising objections since last summer.
NACS was among the first to voice its concerns. The association's board of directors, comprised of more than two dozen retailers, unanimously rejected the proposed settlement agreement because it does not introduce competition and transparency into the credit card interchange fee market.
NACS also joined with several other organizations to appeal Gleeson's ruling granting preliminary approval. The U.S. Court of Appeals for the Second Circuit ruled in January that an appeal should wait until objections to the settlement are filed and heard in September.
For more information on the settlement, go to www.paymentcardsettlement.com.
To opt out or object, go to www.merchantsobject.com.