Newspaper article The Record (Bergen County, NJ)

Retail Group Fights Swipe-Fee Ruling

Newspaper article The Record (Bergen County, NJ)

Retail Group Fights Swipe-Fee Ruling

Article excerpt

The 8-year-long fight between retailers and MasterCard and Visa over credit card swipe fees is expected to last another year or longer, with the nation's largest retail group joining the legal battle against a settlement that was supposed to end the dispute.

The National Retail Federation is appealing a controversial settlement of a swipe fee lawsuit that was approved Dec. 13 by U.S. District Judge John Gleeson in federal court in Brooklyn.

The settlement, which has been rejected by many of the nation's retailers, requires MasterCard and Visa to pay $5.7 billion in damages and would allow retailers to pass along a portion of the swipe fees to consumers in the form of surcharges.

But since the terms of that settlement were revealed in July 2012, more than 8,000 retailers have dropped out of the class- action lawsuit. Retailers say the settlement does nothing to reduce high swipe fees and would bar participants from any future lawsuits against the card companies.

In its appeal, filed Thursday, the National Retail Federation is asking the 2nd U.S. Circuit Court of Appeals to overturn Gleeson's ruling approving the settlement. The Home Depot and a coalition of 21 retailers that includes Target Corp. and Macy's Inc. also have filed appeals.

"We are fairly confident that when the court of appeals looks at this travesty, they'll realize it needs to be sent back for a second look," said Mallory Duncan, the National Retail Federation's senior vice president and general counsel, in a telephone interview Friday.

Credit card swipe fees average 2 percent of the transaction, so a merchant would pay two cents for a $1 credit card charge, $2 for a $100 charge, and $20 for a $1,000 purchase.

Instead of lowering the credit card fees, which is what retailers wanted, the settlement proposes that merchants pass them along to consumers in the form of surcharges, Mallory said. "That is absolutely the opposite of what retailers sought, and major retailers have soundly rejected surcharging."

As part of the proposed settlement, MasterCard and Visa agreed to begin letting merchants pass along surcharges starting a year ago, in January 2013. …

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