After the rejection of the Visa/Mastercard settlement, the NRF hopes that real reform for swipe fees be reached.

The National Retail Federation (NRF) has stated it approval of the ruling made by the U.S. Court of Appeals for the Second Circuit in New York, which struck down the 2012 settlement of a class action lawsuit over Visa and MasterCard’s credit card swipe fees.

“This ‘settlement’ was never a settlement on behalf of the retail industry but rather a backroom deal that failed to represent the interests of retailers,” NRF senior vice president and general counsel Mallory Duncan said. “It would have given merchants pennies on the dollar for the price-fixing they have suffered at the hands of the big credit card companies and would have done nothing to end price-fixing or to lower swipe fees going forward. Now it’s time to seek real reform of these still-skyrocketing fees whether it be in court or in Congress.”

“NRF challenged this settlement because it allowed Visa and MasterCard’s anti-competitive practices to continue,” Duncan said. “The court recognized this and struck them down accordingly.”

“This is not just a business-to-business dispute,” Duncan said. “These fees drive up the price of retail merchandise, costing the average family hundreds of dollars a year in added expenses.”

NRF in 2014 asked the appeals court to overturn the December 2013 approval of the settlement by U.S. District Court judge John Gleeson, saying a broad cross section of the retail industry ranging from independent Main Street stores to national chains opposed the deal.

Gleeson approved the $7.25 billion antitrust settlement even though NRF and others had argued for more than a year that it failed to reform the price-fixing system under which Visa and MasterCard set fees for credit cards issued by thousands of banks. Rather than lower the fees, the card companies proposed in the settlement that they be passed along to consumers as a surcharge. Major retailers rejected the surcharge proposal, saying it was the opposite of what they sought.

The settlement came in a 2005 lawsuit brought by 19 retailers and trade associations but 10 of the plaintiffs, including all of the associations, rejected the settlement when it was unveiled in 2012. NRF was not a plaintiff in the case but argued against it because its class action status would have imposed its terms on thousands of NRF members. NRF’s 2014 appeal noted that 19% of merchants by card volume had formally objected to the settlement and that 25% had opted out, amounting to a “Who’s Who of American merchants.”

Small retailers would have seen as little as a few hundred dollars under the settlement. Retailers who rejected the monetary settlement would have still been bound by other restrictions the court would not let them opt out of, including a prohibition on future lawsuits over the fees.

“Numerous objectors and opt-out plaintiffs argue that this class action was improperly certified and that the settlement was unreasonable and inadequate,” the appeals court wrote in today’s ruling. “We conclude that the class plaintiffs were inadequately represented.”

Credit card swipe fees average about 2% of each transaction and amounted to about $30 billion a year at the time of the settlement.