In both 20, Walmart and Capital One fell far short of their goal regarding the number of cards issued, according to Capital One. But Walmart later conveyed that it did not believe the terms of its deal with Capital One were sufficiently favorable to justify any real investment in advertising the cards, according to Capital One's court filing. For example, the card company said that Walmart refused to incentivize its stores to promote the cards and failed to train in-store employees to do so.Ĭapital One said that when it raised the marketing issues with Walmart, the retailer initially offered excuses. "Capital One disputes Walmart's unfounded claims and is pursuing counterclaims for Walmart's failure to perform its contractual obligations to market the card program, thereby stymying its growth and profitability."Ĭapital One's court filing made several allegations related to Walmart's efforts to market the credit cards.
"Walmart's lawsuit is an attempt to extricate itself from the partnership it agreed to just a few years ago because it no longer likes the economic terms," a Capital One spokesperson said in an email. In Capital One's response to the April 2023 lawsuit, the card issuer argued that the customer-service issues had no meaningful impact on either Walmart or customers - and that Walmart deliberately misinterpreted the contractual provisions that involve the right to terminate the deal in connection with customer-service shortcomings.Ĭapital One also said that Walmart's purported concerns about customer service were merely a pretext to get out of a contract that the retailer wanted to terminate for other reasons. Capital One was supposed to post conforming payments within one business day in 97% of cases, but it only did so 55% of the time at one point, and 86% of the time at another point, according to Walmart's lawsuit. One of those benchmarks involved posting customer payments within one business day of when they were received. In its lawsuit, Walmart alleged that Capital One failed to meet certain customer-service benchmarks, which gave the retailer the contractual right to terminate the deal. Walmart currently partners with Affirm on a buy now/pay later option. But it has reportedly been gearing up to offer a buy now/pay later service that shoppers could use at Walmart and other stores. The fintech venture backed by Walmart, which is run by former Goldman Sachs executives, has been tight-lipped about its plans. In the meantime, he said, shoppers can continue to use Walmart-branded credit cards issued by Capital One. But he said that Walmart expects to bring a new credit card program to its customers within the next 12-18 months. Hargrove declined to comment specifically on Capital One's allegation that Walmart is planning to move its credit card program to the fintech joint venture. "We fulfilled our obligations to promote the Walmart credit card as the exclusive consumer credit card program within Walmart-branded channels," he said. "Capital One's claims are false, and we will address them in court," Hargrove said Tuesday. Walmart spokesperson Randy Hargrove denied Capital One's allegations.
In response, Capital One is asking a judge to declare that Walmart has no right to terminate the contract early, and to award monetary damages to the McLean, Virginia-based card issuer. "Walmart is positioning itself to compete directly with Capital One to provide credit and payment products to Walmart customers," Capital One said in its court filing.Ĭapital One's allegations came in response to a lawsuit filed by Walmart, which wants a court to rule that it was legally entitled to terminate the credit card contract.
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