PORTLAND, Maine - If Andy Charles is any indication, retailers are not rejoicing over the tentative $7.3 billion proposed settlement of the MasterCard and Visa antitrust lawsuit, The New York Times reports. Charles, who operates three locations of Haven€™s Candies, said he€™s not expecting much in the way of relief from the settlement.
The settlement does allow merchants to give cash discounts, but Charles will not to keep customer goodwill. "When somebody€™s in my store, I want them to be impressed by both the quality of my products and the service they receive," he said. "And if I suddenly have to get into a conversation where I€™m penalizing them if they use a credit card, it doesn€™t make for very good customer service."
But numerous retail groups, including NACS, have rejected the settlement outright, putting the deal in jeopardy. Even Sen. Richard Durbin (D-IL) called the settlement "a stunning giveaway to Visa and MasterCard." A court has to approve the proposal, which will likely take until mid-2013.
Charles saw one part of the settlement that could work in a retailer€™s favor: allowing merchants to band together to get a lower rate. "It would theoretically allow merchants to negotiate a lower cost of interchange, which right now is out of control and growing," he said. "But how do you negotiate when there€™s only one game in town?"
"Merchants are allowed under the law to form buying groups right now, even without a settlement," said Doug Kantor, NACS legal counsel. "The problem has always been, Visa and MasterCard don€™t bargain with those groups in a fair way."
NACS, a class plaintiff in the litigation, continues to hear from retailers and associations also concerned with the terms of the proposed swipe fee antitrust settlement. Because the proposed settlement does not introduce competition and transparency into the broken credit card swipe fee market, the NACS Board of Directors rejected the proposed settlement agreement.
NACS suggests that retailers proceed with caution, especially if they receive unsolicited sales calls that offer a cut of the settlement funds.
"There is no need to sign any agreements with third parties to obtain settlement funds. We will provide news and updates on a regular basis related to the terms of this proposed settlement and recommend that retailers do their due diligence in going forward," said NACS Senior Vice President of Government Relations Lyle Beckwith.
Beckwith also encouraged retailers to express their opinions regarding the terms of the proposed settlement via local media and in press releases: Tell them what you think of the proposed settlement, and that this issue is far from over. The credit card companies want everyone to think that the lawsuit is settled.
Share what you have done to communicate your opposition to the proposed settlement or share your comments by contacting Lyle Beckwith.