Wal-Mart and Target have wasted little time highlighting the problems they find with the recent class-action credit card fee settlement. And those problems are the settlement’s lack of actual interchange fee controls and very broad waivers.
With years of intense battles against the card networks behind them, it would have been surprising if either Wal-Mart or Target endorsed the credit card fee settlement signed last week. Their respective statements have left no doubt that the endgame for them is credit card interchange fee regulations and nothing less. With an opt out threshold standing at 25% of merchant volume to meet before the settlement can be finalized, one imagines that phone lines are burning up behind the scenes as merchants discuss opt-out strategies and what comes next if they’re successful in forcing the card networks to come back to the table.
But the world’s largest retailer said Tuesday that the settlement doesn’t restrict credit card issuers from continually raising fees merchants must pay when shoppers use their cards. The Bentonville, Ark., company also says the settlement would require retailers to waive their rights to take action against card issuers.
The future now is in merchants’ hands. If they are not successful in breaching the settlement’s threshold, the likelihood they will win the battle to regulate credit card interchange weakens. What they have in hand is a one-time monetary settlement and the right to surcharge consumers. In a spending environment where every dollar counts, that might not be worth two in the bush.
Click here to read more from the Associated Press about Wal-Mart.
Click here to read more from the Minneapolis Star-Tribune about Target.
