NRF opposes credit card swipe fee settlement
The National Retail Federation has announced plans to formally oppose a proposed settlement of a federal antitrust lawsuit over credit card swipe fees charged by Visa and MasterCard. NRF is also urging retailers to carefully consider their own decisions before next week’s deadline set by the court.
“The proposed settlement does nothing to bring swipe fees under control, and would give Visa and MasterCard a legal blessing to continue their abuse of merchants and consumers indefinitely,” NRF SVP and general counsel Mallory Duncan said. “No settlement at all would be better than this one-sided ‘agreement’ written by the card companies for the card companies that would tie retailers’ hands for decades to come.”
While many retailers have already filed paperwork with the U.S. District Court in Brooklyn, N.Y., opposing the settlement, many small retailers have yet to act. Retailers who oppose the plan have until May 28 to say whether they will opt out of the money offered and accompanying restrictions on future legal action, object to proposed injunctive relief that comes with additional restrictions or — as NRF plans — do both. Under the class action terms of the proposed agreement, retailers who do not opt out by the deadline will automatically be considered to have accepted the settlement, and will give up the right to file future lawsuits over the fees and other restrictive rules.
NRF believes the proposed settlement fails to reform the price-fixing system under which Visa and MasterCard set the schedule of swipe fees followed by the thousands of banks that issue their credit cards. The organization also believes the proposed settlement fails to introduce transparency that would lead to competition to lower the fees. Rather than lowering the fees, the card companies have proposed that the fees be passed along to consumers in the form of a surcharge, even though most major retailers have rejected surcharges as the opposite of what they have sought during the years-long fight over swipe fees.
Retailers who do not opt out — and thereby become fully bound by the restrictions of the agreement — will be eligible for a share of $7.25 billion. But the figure amounts to less than three months’ worth of swipe fee charges, and the small retailers hit hardest by the fees would give up their rights for as little as a few hundred dollars.
The suit was brought in 2005 by 19 trade associations and individual retail companies, but a majority — including all six trade associations — rejected the settlement when it was proposed last summer. NRF, like most retailers, is not a party to the lawsuit, but has led the retail industry’s opposition to the settlement because NRF member companies would be dragged into its terms as part of the class action.
Averaging about 2%, swipe fees are a percentage of the transaction taken by banks each time a consumer swipes a credit card to pay for a purchase, and total about $30 billion a year nationwide. The fees have tripled over the past decade, and drive prices up for the average household by more than $250 per year.
Lowe’s sales feel the chill in Q1
Mooresville, N.C.-based Lowe’s reported net earnings of $540 million for the quarter ended May 3, 2013, a 2.5% increase over the same period a year ago.
Sales for the quarter decreased 0.5% to $13.1 billion from $13.2 billion in the year-ago quarter. Comparable-store sales for the quarter decreased 0.7%.
“Results for indoor categories were solid for the quarter, a testament to the team’s continued focus on improving our core business through cross-functional collaboration and consistent execution in stores and across other selling channels,” said Robert Niblock, Lowe’s chairman, president and CEO.
“Cooler than normal temperatures and greater precipitation resulted in a delayed spring selling season, which impacted our results in exterior categories,” Niblock added. “While overall performance in the month of March was particularly soft, April improved significantly, and we have maintained that positive momentum through the first few weeks of May.”
The company repurchased $1.0 billion of stock and paid $178 million in dividends in the first quarter of 2013, moves that it described as "delivering on the commitment to return excess cash to shareholders."
As of May 3, 2013, Lowe’s operated 1,755 stores in the United States, Canada and Mexico, representing 197.5 million sq. ft. of retail selling space.
Lowe’s said it expects to open about 10 new stores this year.
Lowe’s reported its results the day after rival Home Depot announced first-quarter sales of $19.1 billion, up 7.4%.
People in the News: Promotion at Arrow Fastener Co.
Saddle Brook, N.J.-based Arrow Fastener Co., manufacturer of manual and electric staples, nail guns, and glue and rivet tools, has named Roberto Izaguirre as VP sales.
Just prior to receiving his new appointment, Izaguirre served as VP international sales, responsible for pursuing the addition of new distribution channels, new partners and new business opportunities for Arrow in Europe, the Pacific Rim, Asia and Latin America. In his new position, Izaguirre will be responsible for all domestic and international sales. Arrow sells its products through home centers, mass merchants and specialized retailers.
He will continue to report directly to Arrow Fastener president Gary DuBoff.
“I am very excited to have Roberto leading our sales organization," said DuBoff. "His strong track record in international sales and category expertise are tremendous assets for Arrow as he continues to drive sales. He has the right combination of creativity and pragmatism to guide differentiated customer-focused solutions and integrated communications."
Prior to joining Arrow, Izaguirre was VP sales and marketing for Signature Control Systems (previously L. R. Nelson Corporation, Peoria, Ill.), a manufacturer of professional underground irrigation products. He also was director general of México, Ace Hardware International.
Arrow operates as a subsidiary of Masco Corp.