Walmart's Legal Gamble: Why Retailers Say the Swipe-Fee Settlement Is Unconstitutional

Jessica Albright · 2026-09-22

When you swipe your card at Walmart, a hidden battle is brewing behind the scenes—and it's not just about a few cents. A group of major retailers, including Walmart, is taking a stand against a settlement that they say tramples on their constitutional rights. At the heart of the dispute is the multibillion-dollar swipe-fee settlement, which retailers argue unfairly locks them into a class they never wanted to join. ### The Battle Over Swipe Fees Swipe fees, also known as interchange fees, are charges that merchants pay every time a customer pays with a credit or debit card. These fees add up fast—billions of dollars annually—and retailers have long argued they're too high and lack transparency. In 2012, a group of merchants sued Visa, Mastercard, and major banks, leading to a proposed $7.2 billion settlement in 2013. But not everyone was on board. Walmart and other retailers opted out, arguing the settlement didn't go far enough to reform the system. ### Why Retailers Cry Foul Now, the plot thickens. The settlement class includes merchants who didn't actively opt out, but Walmart and others claim that forcing them to stay in the class violates their due process rights under the Fifth Amendment. In simple terms, they argue they're being deprived of their property (the right to sue independently) without a fair say. It's like being forced to join a gym you never signed up for—and then being told you can't cancel. ### The Due Process Argument The retailers' legal team contends that the settlement's opt-out process was flawed and that many merchants didn't receive proper notice. They argue that being bound by a settlement they didn't agree to—and that may not serve their best interests—is unconstitutional. This isn't just a technicality; it's a matter of fairness. If the court agrees, it could upend the entire settlement and force a renegotiation. ### What's at Stake? For retailers, the stakes are huge. Swipe fees cost them an estimated $50 billion a year, according to the Merchants Payments Coalition. That's money that could be used to lower prices, hire staff, or invest in better customer experiences. For consumers, it could mean the difference between a few cents and a few dollars on every purchase. And for the payment networks, it's a fight to preserve a lucrative revenue stream. > "This isn't just about money—it's about fairness and the rule of law," said a spokesperson for one of the retailers involved. "We deserve our day in court." ### The Road Ahead The case is now before the U.S. Court of Appeals for the Second Circuit, and the outcome could have far-reaching implications. If the court sides with Walmart and other retailers, it could set a precedent for how class-action settlements are structured, giving merchants more power to challenge unfair terms. If it sides with the settlement, retailers may have to accept the terms and move on—but don't expect them to stop fighting for lower fees. In the meantime, businesses should keep a close eye on this case. It's a reminder that even the fine print in a settlement can have major consequences. And for anyone who accepts card payments, it's a story worth following—because the outcome could affect your bottom line.