The Retailer Summer Edition_2020

Merchants must now accurately calculate and fully substantiate their claims to stand up against the schemes’ scrutiny and achieve the maximum pay-out

The judgment was an overall success for merchants: however, the ‘broad-axe’ issue remains an obstacle as the lone successful argument made by the schemes in the Sainsbury’s case. The Court’s decision held that, once the schemes have raised the issue of mitigation of the MIFs through pass-on – which can arise through merchants negotiating lower prices with suppliers or passing on the MIFs to consumers through higher prices – a heavy burden is placed on the merchant to provide evidence that demonstrates whether, and to what extent, MIFs were actually passed on. As a result of this decision, merchants now have to undertake robust analysis to fully quantify their claims and assess their internal decision making in relation to MIFs to receive maximum compensation. What’s Next for Merchants? Lodging and pursuing an interchange reclaim is by no means a straightforward process. Merchants are potentially limited in resource, analytical insights and visibility of an incredibly opaque payments market, in order to counter both the schemes' pass-on arguments and quantify the true extent of their losses. Merchants need economic expertise to stand up to scheme scrutiny and receive the payouts they’re entitled to - any broad-brush calculations, gaps in analysis, assumptions or unsubstantiated claims will likely result in significantly reduced reclaims. Nevertheless, the Supreme Court's ruling has the potential for the UK retail industry to receive billions, with some individual merchants poised to claim tens of millions back from the schemes. At CMSPI, we have been supporting the UK merchant community with interchange reclaims for many years – using our payments industry expertise, unique benchmarking insights and in-depth transactional analysis to accurately calculate and fully substantiate our clients’ claims. As independent merchant champions, we’re proud to be supporting the community to maximise their claims and stand up against the schemes’ scrutiny. Contact details: The time is ticking for merchants to lodge a claim due to a limitation on liability periods. If you would like to find out more about interchange litigation and how we can help maximise the value of your claim, please get in touch via email:

CALLUM GODWIN // // // +44 (0)161 300 8767

Please note that CMSPI is not a law firm nor is it in the business of providing legal advice or counsel. Nothing in this article constitutes legal advice or gives rise to an attorney/client relationship. We recommend that appropriate legal advice be sought in relation to any specific circumstances.

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