The deadline to opt out of the $7.25 billion Visa/MC Settlement has past. The lawsuit filed by 17 retailers led by Target and the opt out of led by Wal-Mart is not surprising given the May 28 Settlement Class opt out deadline.
Some of the retailers that have opted out include:
Abercrombie & Fitch
American Signature Furniture
Ascena Retail Group
Costco Wholesale Corp.
The Bon-Ton Stores
These retailers have a valid argument in that the proposed settlement does not address structural flaws of the interchange system, and shields the card networks and banks from future litigation. Some retailers who opted out have even filed a new lawsuit. As one retailer stated off the record, “I feel that foregoing the right to any and all future litigation is an invitation to Visa and MasterCard to abuse us in the future.”
The proposed settlement has a 25 percent carve out of the $6.05 billion Cash Settlement for merchants who exclude themselves from the settlement. According to lawyers close to the settlement, the collective claims value of the merchants opting out to date is about 12 percent. That number will increase as more merchants withdraw from the settlement, but will not likely exceed 25 percent. So there is a reasonable chance the settlement could be approved in September 2013 despite this lawsuit and settlement withdrawals.