Anti-trust Settlement Cash on its Way to Retailers
Staff -- Home Textiles Today, 12/14/2009 12:00:00 AM
New York —
Merchants across the nation have begun to receive checks for approximately $1.1 billion as part of a landmark antitrust settlement over Visa and MasterCard-branded signature debit cards.
The payments, which were mailed starting Dec.8 to approximately 634,000 merchants across the United States, will provide a boost to profits in the midst of a challenging holiday retail season. With retail operating margins for most retailers averaging less than 5%, the $1.1 billion payment is the equivalent to a $22 billion increase in merchants' overall holiday revenue, according to law firm Constantine Cannon, which specializes in anti-trust cases and negotiated the settlement.
"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," said Jeffrey I. Shinder, managing partner of the law firm's New York office.
In addition to the compensation, the settlement stopped Visa and MasterCard from forcing merchants to accept Visa and MasterCard-branded signature debit card products as a condition of accepting Visa and MasterCard credit cards. Court decisions in the case estimated that the total value of the injunctive relief ranged from $25 to $87 billion.
Sandy Kennedy, president of the Retail Industry Leaders Association, said: "This is a welcome holiday bonus to retailers nationwide. Retail sales are just beginning to stabilize, and with the holiday season in full swing, this remarkable payment should help retailers continue to hire and retain workers as we head into the New Year."
Tracy Mullin, president and ceo of the National Retail Federation, said: "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."
NRF and RILA were class representatives in the lawsuit.
The payment represents the final large-scale disbursement of the $3.4 billion settlement in regard to Visa Check/MasterMoney Antitrust Litigation. This month's payments accelerate a payment schedule that was not set to end until 2012.
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