Inadequate customer service is providing an early exit for Walmart from a deal with Capital One, reports Reuters.
A federal judge ruled in favor of the boxed retailer on Tuesday, breaking a 2018 agreement that made Capital One the exclusive issuer of Walmart-branded credit cards.
Walmart sued Capital One following a number of customer service issues that were uncovered in late 2022 and early 2023.
The Bentonville, Ark., retailer said the Capital One deal could be terminated if any of the 13 “critical” customer service standards were violated on at least five different occasions during a 12-month period.
Walmart accused Capital One of slow transaction posting on cardholder accounts and failing to replace lost cards in a timely fashion.
Capital One, however, countered by stating the deal could only be terminated if the credit card company failed any single standard five times.
U.S. District Judge Katherine Polk Failla disagreed, stating Capital One’s interpretation would leave Walmart with zero leverage.
Both parties have until April 19 to work out remaining claims and counterclaims. Capital One is considering appealing the decision.
The news comes in the wake of a $30 billion settlement involving Visa and Mastercard over credit and debit card swipe fees.
The settlement is one of the largest in U.S. antitrust history and will limit credit and debit card fees for merchants by reducing their U.S. credit card interchange rates or swipe fees for at least a five-year period. It will give retailers more choice in how they accept digital payments.
