Skip to main content
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Find a Lawyer

More Options

Payback: Card Lawsuit Payout to Retailers

By Minara El-Rahman on December 17, 2009 | Last updated on March 21, 2019

An antitrust lawsuit settlement will force Visa and MasterCard to make a $1.1 billion dollar payout to retailers. AP reports that the payout was the result of a class action antitrust lawsuit that claimed that both Visa and MasterCard attempted to fix prices and restrict trade.

The suit was over Visa and Mastercard having forced merchants to accept their signature debit cards if they wanted to accept their credit cards. The debit cards, by the way, featured some hefty transaction fees.

News of card companies paying out no doubt sounds nice to merchants who have been battling soaring interchange fees levied on retailers who want to accept plastic.

To retailers, this settlement disbursement is going to be a nice holiday surprise. Many small business retailers have noticed that holiday spending is lower because of the recession. Tracy Mullin, President and CEO of the National Retail Federation, told AP: "The timing of these checks couldn't be better. They come during a difficult holiday season and will help retailers position themselves to participate in the economic recovery that lies ahead."

According to a press release from the law firm Constantine Cannon LLP, since retail operating margins for most retailers are averaging less than 5 percent, the $1.1 billion payment is the equivalent to a $22 billion increase in merchants' overall holiday revenue.

This has been something that small businesses have needed. Jeffrey I. Shinder, Managing Partner of the New York office of Constantine Cannon, said: "This is likely the largest single payment to businesses in a class action in history, and it comes at a time when banks have all but stopped lending to the smaller retailers that make up the backbone of the class." The payout may be just what retailers needed in order to retain workers and stay afloat in their business.

Constantine Cannon partner Robert L. Begleiter said: "This is a gratifying conclusion to many years of intense effort. We were especially pleased with the strong support we received from the merchant community as we brought the payment process to resolution. This is a loud and clear signal of how welcome this distribution is." The lawsuit was a battle seven years in the making.

More than 90% of the recipients of this payout are retailers. The remaining 10% are charitable organizations and state government agencies.

For more information, please visit our Related Resources:

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:
Copied to clipboard