Visa and Mastercard Settle Swipe Fee Class-Action Lawsuit

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Bookstores that accept Visa- and MasterCard-branded cards are potentially included in a recent settlement of a class-action lawsuit. Visa and MasterCard have agreed to pay between $5.54 billion and $6.24 billion to a class of more than 12 million retailers as part of a settlement involving swipe fees. Booksellers and other retailers that accepted Visa- and MasterCard-branded cards at any time from January 1, 2004, until the court approves the settlement will be included in the class.

“Some booksellers may have received e-mails from law firms volunteering to handle the class action for them,” said David Grogan, director of ABFE, Advocacy and Public Policy for the American Booksellers Association. “It is important to read the fine print on any solicitation like that. These companies offer to handle the filing for a percentage of the claim.” Grogan stressed that booksellers should bookmark the court-authorized settlement website and contact him if they have any questions or concerns regarding the settlement.

The most recent settlement, announced in September 2018, could bring a conclusion to a legal challenge that began in 2005. That year, a lawsuit was brought by 19 retailers and trade associations, but 10 of the plaintiffs, including all of the associations, rejected in 2012 a $7.25 billion settlement. Additionally, at the time, almost 8,000 merchants, representing at least 25 percent of Visa and MasterCard volume, had opted out of the antitrust lawsuit settlement, including 10 of the original 19 named class plaintiffs.

Several national retail associations, including the National Retail Federation (NRF), the Retail Industry Leaders Association (RILA), and the American Booksellers Association recommended that their members opt out and object to the settlement due to key provisions, including the stipulation that retailers that opted in to the settlement waived their right to bring future antitrust lawsuits against the companies in perpetuity.

At that time, the groups also argued that the settlement amounted to less than two months’ worth of swipe fees, based on the swipe fees collected by the credit card companies on an annual basis. The groups successfully asked the court to overturn the settlement.

One improvement to the latest settlement is that merchants that opt in to the new settlement will face only a five-year ban on suits against Visa and Mastercard, as opposed to the permanent ban on future swipe fee lawsuits mandated in the earlier settlement.

NRF, however, has publicly stated that it remains unhappy with this settlement. Under the new plan, merchants would now be paid $6.2 billion, a reduction from the $7.25 billion originally offered and still only a fraction of the nearly $250 billion in fees charged during the period covered by the suit, the retail association noted in a press statement when the settlement was announced. And negotiations are continuing on possible changes regarding how Visa and MasterCard set the complex matrix of swipe fees followed by virtually all banks that issue their cards, a practice NRF contends violates federal antitrust law.

NRF has said it is watching the process closely but cautioned that “significant changes” in the way swipe fees are set are “integral to helping merchants.”

Though the settlement has been filed, the court must still approve the agreement before class members can file a form for restitution. According to the court-authorized settlement website, known class members will be mailed a notice about their legal rights and the release of their claims following preliminary approval. If the court grants final approval and any appeals are resolved, a claim form and deadline will be established. Updates on the settlement will be posted on the court-authorized site.

The settlement website provides an FAQ for any merchant with questions about the settlement. ABA members with further questions can contact