Walmart Sues Capital One, Seeks to End Credit Card Deal
Walmart has reportedly sued Capital One to end a four-year-old credit card partnership. According to published reports last week, the retail giant accuses the bank of failing to live up to its customer care standards. The companies announced a partnership in 2018, though it didn’t go into effect into the following year. The collaboration made Capital One the exclusive issuer of Walmart’s credit card and co-branded credit card program in the U.S. According to the suit, Capital One missed the mark in a number of “critical” customer care categories, such as failing to promptly post transaction information to cardholders' accounts, and not delivering replacement cards within five days.
Total Retail's Take: As one would expect in a legal dispute, both sides are telling a different story. Walmart's attorney's wrote in the suit that "Capital One was consistently unable to meet the customer service standards required by the contract," and thus the retailer filed the lawsuit to prematurely end the partnership. However, Capital One's spokesperson disputes Walmart's claims, saying “these immaterial servicing issues were cured by Capital One pursuant to the terms of the agreement, without harm to customers, the program, or Walmart. Capital One disputes that Walmart has any right to change the terms of the existing partnership midstream, and we will vigorously protect our contractual rights in court.”
Where does the truth lie? That's for the court to determine. What we do know is that Walmart needs to take every step to protect the experiences of its branded credit card users, who figure to be among its most loyal customers. As such, it won't be tolerant of poor customer service from its third-party vendor, in this case Capital One. Furthermore, given the critical nature of payment data and payment security, it's understandable that Walmart would want to quickly resolve any potential issues in this arena. Whether fault lies at the feet of Capital One is to be determined.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.