Nearly Three Years Later, Merchants Begin to Get Wal-Mart Payouts

The first checks to merchants entitled to some of the $3.1 billion settlement fund in the Visa/MasterCard debit card antitrust lawsuit went out last month, but that was only a small fraction of the expected total distribution from what is widely known as the Wal-Mart settlement. That's according to the lead attorney for the victorious retailers, led by Wal-Mart Stores Inc., that sued Visa USA and MasterCard International in 1996 over debit-card acceptance. Some 22,000 checks with a total value of between $50 million and $60 million went out Dec. 19, Lloyd Constantine, chairman of the New York City-based law firm Constantine Cannon P.C., tells Digital Transactions News. “These were the simplest, earliest, cleanest forms,” says Constantine. “That was the first part of the first distribution.” An administrator overseeing the process mailed more than 8 million claim forms in September 2005 to merchants believed to have accepted Visa and MasterCard debit cards between October 1995 and June 2003, the time period covered by the class-action suit, according to the Washington, D.C.-based National Retail Federation trade group. Merchants had until Dec. 28 to file claims in the settlement being overseen by the U.S. District Court in Brooklyn, N.Y. Merchants could file their claims by mail or online at a dedicated Web site. Constantine does not expect to have data about the total number of claims or their value until late this month. Constantine says he may recommend that the court consider claims filed up to a few days late. The NRF, meanwhile, is urging retailers not to sell their claim rights to third parties, saying they may miss out on a possible second distribution. After suffering serious reversals in pre-trial legal maneuvering, the card associations agreed in the spring of 2003 to pay merchants slightly more than $3 billion, end their “honor-all-cards” rules that forced merchants that accepted bank credit cards to also accept Visa- and MasterCard-branded signature debit cards, and to lower debit card interchange rates. Merchants led by Wal-Mart challenged the forced acceptance of signature debit cards on antitrust grounds. Visa, the larger network, is providing two-thirds of the settlement fund.