Grocers ‘Disappointed’ in SCOTUS’ Amex Ruling

Grocers ‘Disappointed’ in SCOTUS’ Amex Ruling FMI NRF RILA Credit Card Swipe Fees

In response to the U.S. Supreme Court’s 5-4 ruling in favor of American Express and its rules prohibiting retailers from directing customers to use other, less expensive credit cards, Food Marketing Institute and other retailer trade groups expressed their disapproval.

“U.S. merchants pay an estimated $97 billion annually in hidden processing fees,” said Hannah Walker, senior director of technology and nutrition policy at Arlington, Va.-based FMI, citing a figure from the May 2018 Nilson Report newsletter covering the payments industry. “These fees, particularly credit card fees, continue to increase unchecked every year and are hidden from consumers. We’re disappointed in the court’s decision to prohibit retailers from discussing hidden fees with their shoppers as well as banning customer incentives to use a less expensive card at checkout. This decision stifles competition and throws a curtain on transparency in the credit card market, harming both consumers and retailers.”

Beyond the grocery sector, reactions were similar.

“[The] ruling is a blow to competition and transparency in the credit card market,” asserted Stephanie Martz, SVP and general counsel of the Washington, D.C.-based National Retail Federation. “The American Express rules in question have amounted to a gag order on retailers’ ability to educate their customers on how high swipe fees drive up the price of merchandise.”

Added Martz: “By denying merchants the right to simply ask for another card or offer an incentive for using a preferred card, the Supreme Court has undermined the principle of free markets where one company should not be allowed to dictate the practices of an entire industry in order to protect its business model. This misguided decision represents a missed opportunity to take a stand in favor of free markets and bring soaring credit card fees under control.”

“Today’s decision is a loss for American consumers,” noted Deborah White, general counsel of the Arlington-based Retail Industry Leaders Association and president of the organization’s Retail Litigation Center.“Competition in the credit card space is sorely lacking. The court’s decision to uphold the Second Circuit’s misguided approach will allow AmEx to continue to stifle competition and prevent consumers from understanding the cost of rising credit card fees.” 

White vowed, however, that the industry “will continue our efforts to fight the card companies’ anti-competitive rules on multiple fronts.” 

Last December, a number of retailer trade groups, including FMI, NRF RILA and the National Grocers Association, filed a joint amicus brief on the legality of the American Express' "anti-steering" rules.