Federal Appeals Court OKs $5- to $6-Billion Swipe Fee Settlement for Retailers

Merchant fees imposed by Visa, Mastercard at issue in case
Swipe fees
Photograph: Shutterstock

A federal appeals court has given its preliminary approval for $5 billion to $6 billion in settlement money for retailers in a class-action lawsuit over the fees Visa and Mastercard charged merchants for accepting their cards as payment.

In the case called In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, which dates back to 2005, the U.S. Court of Appeals for the Second Circuit agreed with a U.S. District Court’s orders to settle the case and grant relief to retailers and other plaintiffs after the credit card giants violated antitrust laws by fixing intercharge fees at excessive levels.

Convenience-store operators covered by the settlement can apply for an award at, which will be updated as new information is available. Those entitled to the award must have accepted Visa or Mastercard payments at any time from Jan. 1, 2004 to Jan. 25, 2019, and may not be on an excluded list of dismissed cases or late objectors, according to the website. Love's Travel Stops & Country Stores, Murphy Oil USA, Sheetz, Kum & Go, Kwik Trip, QuikTrip, Wawa and RaceTrac Petroleum are among the convenience stores and fuel centers on the list of cases dismissed or settled earlier.

But the class-action case isn’t finished. The district court has been told to reduce the size of the service awards for retailers in the case. Besides this, defendants and companies denied the opportunity to participate in the litigation are likely to file appeals. Several oil companies and fuels-industry associations were objectors and weren't part of the settlement. Recent motions were denied, in an effort to contain the case. The lawsuit involved $523 million in legal fees, according to Reuters.

The case reflects how onerous the challenges are for convenience stores and fueling centers in their fight over what they considered to be excessive interchange fees from Visa and Mastercard. 

Swipe fees continue to be an ongoing point of contention for retailers hit by COVID-19 and other economic issues affecting their sales. In September 2022, about 1,700 companies and more than 200 merchant trade groups asked the U.S. Congress to support the bipartisan Credit Card Competition Act of 2022, legislation that aims to enhance competition and choice in the credit card network market.

The case was filed in 2005 alleging Visa and Mastercard fixed their transaction costsalso called swipe fees or interchange fees“at supracompetitive levels” in violation of the Sherman Act. These are the costs merchants pay to accept Visa and Mastercard payments at the register. The merchants have had little say in how much the credit card companies take in fees. Over 30 class-action lawsuits have been brought to court on behalf of retailers who said the fees were unfair, according to court documents.

While the class-action settlement includes about 12 million retailers, not all retailers were part of the settlement as some cases were settled or dismissed previously. For more information on which retailers are included, view the list of Dismissed Plaintiffs 

As the lawyers involved argued over exactly which retailers would be included in the class-action case and how much they would receive in the settlement, new legal motions were spawned, but the courts denied many of these, such as a motion to intervene filed by attorneys for Jack Rabbit and 280 Station earlier this month. The fueling centers wanted their case to be decided before the settlement funds were awarded to ensure they would receive some of the money, but a district court deferred to the appeals court.

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