WASHINGTON (April 16, 2013) — Citing a difference of opinion among its members, the Tire Industry Association (TIA) has taken no stand on a federal court decision that allows retailers to add a surcharge of up to 4 percent on transactions using Visa or MasterCard.
Since last Jan. 27, retailers have been allowed to exercise the option of adding a surcharge to purchases involving the world's two largest credit card companies.
This option came as part of a November 2009 class-action settlement before the U.S. District Court for the Eastern District of New York in Brooklyn, N.Y. The settlement, which came out of an antitrust lawsuit against Visa and MasterCard, also involves two proposed reimbursement funds totaling $7.2 billion.
While some TIA members feel they can lower their overhead by adding the surcharge, many others feel they would lose their competitive pricing edge by adding it, according to Roy Littlefield, TIA executive vice president.
"We can understand why the settlement happened, and for those who feel they need that break, we can understand why they use it," Mr. Littlefield told Tire Business.
The settlement in the Visa-MasterCard class action was controversial, with several large retailers and retail organizations opposing it.
"This proposal benefits no one but lawyers and credit card companies, and should not be forced on the retail industry or retailers' customers," said Mallory Duncan, senior vice president and general counsel of the National Retail Federation, when the settlement was announced.