More than half a million retailers will get an early holiday gift this year.
Checks totaling more than $1 billion will be mailed to more than 635,000 retailers as part of a federal judge’s approval of an early payout of money remaining from a 2003 settlement of a class action suit against Visa and MasterCard’s credit card practices, the National Retail Federation said.
It will no doubt be a welcome influx of cash at a time when slow sales and ongoing credit problems have leveled sales.
The class action suit – brought by the NRF and about 20 of the nation’s largest retailers during 1996 – was settled for $3.1 billion.
The suit alleged that Visa and MasterCard’s practice of requiring retailers who accept credit cards to also accept their debit cards was a violation of federal anti-trust law.
The signature based cards carry higher transaction fees than independent bank debit cards with a PIN number. The lawsuit included anyone who accepted Visa or MasterCard debit cards from 1992 to early 2003.
The companies were allowed to pay damages on an installment plan scheduled to run through 2012, but agreed this fall to pay $1.1 billion at a single time. The agreement means retailers will receive slightly less money, but that the cash will arrive in time to help with the economic slump.
The plan was approved Nov. 6, but was delayed by a court challenge regarding interest payments. The court rejected the challenge, which made way for checks to go out as early as this week. Shares to the retailers will be based on the volume of signature debit card transactions during the period covered by the suit.