Monday, May 14, 2007

MasterCard Worldwide® Sweepstakes More Like "Cheap"-stakes (commentary

Just like the myriad of other promotional campaigns offered by the two leading card associations, here is one more example of how merchants and cardholders are misled and affected by interchange fees - without even noticing. According to a Businesswire MasterCard Worldwide® release today, the company, along with The Home Depot Announced a "$100,000 Backyard Retreat'' Sweepstakes. Use your MasterCard cards to "automatically enter[ed] for a chance to win a $100,000 Backyard Retreat."

The catch? Read the fine print: PIN-based transactions are not eligible.

What this means is that it forces cardholders to demand that retailers electronically process their payments at the oftentimes much higher credit card rate, rather than at the flat-fee PIN-based rates. What a deal: MasterCard provides one lucky recipient with $100,000, yet retailers are forced to pay out huge interchange fees to the card associations and member banks.

See BW release