Mitch Goldstone is fighting mad.
The operator of 30 Minute Photos Etc., an online photography business, Goldstone learned earlier this year that his cost of accepting MasterCard and Visa cards was going up yet again. With 100 percent of his sales originating on the Internet, Goldstone already pays a premium for accepting bank cards.
And, because 30 Minute Photos Etc. never takes possession of a customer’s bank card, there’s no way of discerning whether the card being tendered is a credit card or a less-costly check card. As a result, all of 30 Minute Photos Etc.’s transactions are processed as card-not-present credit card payments.
When Goldstone learned earlier this year that Visa and MasterCard were raising interchange rates, and that the largest increases would apply to rewards cards, his first move was to ask that the price hikes be rescinded. He sent letters to Visa and MasterCard, but neither replied.
So Goldstone started looking for an attorney. The attorney he hired, K. Craig Wildfang, has a keen familiarity with the bank card business. While serving at the U.S. Department of Justice in the 1990s, he supervised an investigation that led to a Federal court decision stripping Visa and MasterCard rules of provisions barring banks from issuing non-bank cards, such as American Express and Discover.
“I wasn’t planning to sue. I’m not a litigious person,” Goldstone says. “I just wanted Visa and MasterCard to rescind the new interchange rates.
”Wildfang expects the lawsuit will be combined with several other lawsuits and granted status as a class-action suit representing the interests of all U.S. retailers.
Goldstone expects the case will have even greater significance than the so-called Wal-Mart suit, which resulted in an out-of-court settlement last year valued at about $3 billion. “This is the most significant antitrust suit since the breakup of AT&T in the 1980s,” he says.
[source: STORES Magazine, National Retail Referation]
