Retailers questioning $7 billion swipe fee settlement

5 Comments | This entry was posted in Public Policy, Video

The $7 billion settlement in a retail industry lawsuit over Visa and MasterCard swipe fees announced over the weekend was initially reported as a victory for retailers. But as NRF and retail companies have begun to look more closely at the proposed deal, it’s not clear that there would be much long-term impact on the skyrocketing fees.

“The money is significant but money is only temporary – it’s here today and spent tomorrow,” NRF Senior Vice President and General Counsel Mallory Duncan said in a statement NRF released after the settlement was announced. “What we need are changes in the rules that bring about transparency and competition that would be here for years to come.”

Duncan told the CBS Evening News on Saturday that the settlement included one such rule change that appeared to be helpful — a provision allowing retailers to impose a surcharge when customers use a credit card. The provision wasn’t intended to result in actual surcharges but rather to be used as a tool to help retailers negotiate with card companies to reduce the fees.

But Duncan told American Public Media’s radio program Marketplace this morning that closer examination shows that restrictions on the surcharge provision make it “fall really short” of what was intended. In the absence of other significant changes in the settlement, “fees are going to start going right back up again because the tools are ineffective.”

NRF is continuing to work with retailers to assess the impact of the proposed settlement. In the meantime, the deal is not effective unless approved by a federal judge.

Posted in: Public Policy | Video and tagged , ,


  1. avatar Cesar Aguirre
    Posted July 26, 2012 at 2:03 pm | Permalink

    Credit cards companies interest are way too high and burdenson to too many families and just tend to keep on going higher because of the insatiable greed of cards like Visa, Master Card etc. who make billions of dollars in profit every year to pay their over paid executieves their vulgar bonusses. The government should step in and regulate the percentage charged to no more than 10%.
    This is one of the main reasons the country economy, with more people going and even having enough to feed their family and have a roof over their heads.

  2. Posted July 26, 2012 at 2:22 pm | Permalink

    Being a small business “on line” or “Internet Only” store we have just accepted the “swipe” fees as an every day cost of running the business just like utilities, rent, etc even though the expense varies every month due to amount of sales. It is really hard to swallow at the end of the year when seeing the total cost of credit card fees.

  3. avatar Chris
    Posted July 26, 2012 at 5:33 pm | Permalink

    Retailers pay swipe fees – they also pay the added percentage that sales tax adds
    to the transaction. The swipe fee is based on a certain type of Credit card and the type of rewards it pays out to its customers, the better the rewards the more the retail industry pays for those reward cards, anywhere from 1.7 % to 3.25 %, now adding the sales tax to the total enables the banking industry to profit even more because our sales tax has now increased that sale by 5 to 10% the percentage. Talk about a Class action Law suit, Lawyers should be all over this one. Banks profiting from the sales tax. Retailers are paying an added percentage because the states are getting a kick back from the banks on fees small business pay in addition the merchandise and services. The fees should be based not including the Sales tax. Come on America
    Wake the Bleep up.

  4. avatar Annie
    Posted July 27, 2012 at 6:57 pm | Permalink

    Tax internet sales and your tax rate will go down. Eliminate reward cards and your merchant fees will go down. Do not use yur credit cards to supplement your income and your debt will go down. Merchants have to offer credit card to be competitive, but you have to allow for it in your pricing structure. It is overhead plain and simple.
    Stop blaming people who make more money than you do for your problems. It changes nothing and just makes you miserable.

  5. avatar Charles
    Posted August 22, 2012 at 12:08 pm | Permalink

    How many merchants are negotiating directly with card companies directly? I thought that merchants selected their merchant processor by working through their bank or the card processor was bundled into their POS solution. With the latter, a merchant may not have any say in their card processor but have received a reduced price on their POS system. With the former, they may have a few options; however, depending on the size of the business they may have few realistic options to have their banking and card business be as portable as possible to force banks to compete. What I mean is the many small businesses may have some local branch of a MegaBank as their primary creditor and they might have an obligation to order from their menu of merchant processors for bank cards.

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