Your Favorite Retail Store Hates Your Rewards Credit Card
Americans love the points they rack up each time they purchase items with rewards credit cards provided by Visa, Mastercard and other companies.
But popular retailers hate the merchant fees they pay every time customers swipe — so much so that customer favorites Amazon, Target and Home Depot may decide not to benefit from a more than $6 billion settlement that Visa, Mastercard and multiple banks reached on Sept. 18, reported The Wall Street Journal.
Those retailers could continue fighting credit card networks in court to terminate their “honor all cards” rule, even though a June Supreme Court ruling sided with credit card operator American Express Co., according to WSJ.
Retailers want to be able to exclude the cards that charge retailers the most hefty interchange fees, which can be more than 2 percent of the purchase amount, according to WSJ.
Those swipes add up. Merchants shelled out more than $43 billion in these interchange fees in 2017, according to the report.
Were Amazon, Target and Home Depot to be successful, some consumers might find themselves nonplussed at cash registers if retailers no longer take certain kinds of popular cards. Approximately 92 percent of “all U.S. credit-card purchase volume” is charged on rewards credit cards, which is a marked increase from 67 percent in 2008, according to WSJ.
Credit card networks are not the only businesses with a stake in keeping “honor all cards” as a general precedent. The banks that partner with Visa and Mastercard “rely heavily” on credit card fees, according to WSJ.
These networks and banks maintain that when merchants honor all cards, they are not just supporting large corporation but small banks, reported WSJ. (RELATED: With Americans Shopping More, Retailers Are Offering Perks In A Scramble To Hire Workers)
American Express, which offers a multitude of financial services including credit cards, came out victorious in a Supreme Court case in June. The Supreme Court ruled that American Express could include clauses in contracts with retailers that directed those retailers not to push consumers to pay with credit cards with lower interchange fees, according to American Banker.
Send tips to email@example.com.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact firstname.lastname@example.org.