We will pay again. Retailers reject their own settlement deal with credit cards
Analysts say retailers want to see Congress get involved.
Visa and MasterCard have worked out a settlement with several retailers over swipe fees charged to retailers when customers use credit cards. However, the settlement may be rejected by the judge since a majority of the retailers in the suit are opposed to it.
Credit card companies are crying foul over the rejection of the proposed settlement.
Lawyers for both sides worked out a settlement that would see the banks and credit card companies paying back to merchants some $6 billion while making temporary fee reductions. The deal would also allow merchants to charge customers more for using certain cards.
However, several merchants are objecting to the deal, including Wal-Mart, Target, and Starbucks, as well as several other restraints and retailers. Several of these retailers are not part of the suit, but are sending in their lawyers to fight the deal because they too would be bound by the details of the settlement.
Analysts say this is an unusual show of force against a proposed settlement, particularly one worth so much money.
Credit card companies and banks say there's no way retailers can get a better deal. Unhappy retailers have replaced several of their attorneys.
However, retailers want more transparency into how the fees are set, and several would rather see Congress take up the issue. Attorneys for the credit card companies accuse some retailers of wanting to stalemate the settlement so Congress will act.
Now, US District Judge John Gleeson, a very experienced justice, will decide if the settlement should be approved or rejected. Typically, judges approve settlements, reluctant to upset the delicate agreements worked out between the parties themselves.
Even if Gleeson intends to approve the deal, the process is expected to last well into 2013. If he rejects it, it will stretch out much longer as both sides must essentially start over.
In any case, the controversy over fees will continue for some time to come, and at the end of the day, it will be consumers who pay.
© 2012, Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: Retailers, credit cards, fees, swipe fees, interchange fees
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