Supreme Court: Retailers Can’t Offer Incentives To Use Less-Expensive Cards Posted by Association of Vermont Credit Unions on 11:19 AM

The Supreme Court has ruled in favor of an American Express policy that prevents retailers from offering customers incentives to pay with less-expensive cards. The ruling was immediately blasted by retailers.

The court’s decision is a loss for a dozen-plus states and the Justice Department, which had brought the challenge to American Express’ policy  prohibiting retailers and other businesses from offering consumers discounts or incentives for using a card from a different issuer.

In the 5-4 opinion, the court ruled that government antitrust enforcers were unable to meet their burden of proving that the AmEx anti-steering rules harmed consumers.  The decision split the court along ideological lines with conservative justices in the majority.

Retailers that accept AmEx cards won’t be able to ask customers to use other cards for purchases.

Following the ruling, the National Retail Federation said the decision will . . .

". . . perpetuate a system that costs merchants and consumers billions of dollars a year" and that 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.  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.”

Read the report in entirety on CU Today.