May 30, 2013
PR Approach for Big Legal Battles
Both the Wall Street Journal and BusinessWeek are reporting that major retail chains are suing credit card companies … yes … again. While these consumer titans wage a pitched battle for legal rights, as well as hearts and minds, Ronn Torossian weighs in on who wins.
Seventeen major retailers, led by Target Corp. and Macy’s Inc., have filed a lawsuit against both Visa Inc. and MasterCard Inc. The sticking point, as it always is, happens to be debit and credit card fees. While this sort of corporate legal battle between credit card companies and retailers is nothing new, Ronn Torossian notices an interesting public relations lesson.
The message coming from the retailers is that the credit card companies are charging unfair and exclusive rates, damaging the retailers’ business potential. The credit card companies argue that they are doing nothing more than following a tried-and-true business model. They offer a service and a convenience, both of which have value.
And there is a twist…
In this particular case, the retailers are miffed because they believe the nearly identical rates, fees and regulations imposed by MasterCard and Visa cut out retail competition from the store’s own credit operations.
But neither message considers the truth consumers care most about. They are the ones paying. Yes, the retailers may have to pay higher fees, but they can recoup these fees by charging more for their goods.
And therein lies the major sticking point. When consumers look at court battles such as these, all they think is “how much more will I have to pay now?” This question is a loser for both retailers and credit card companies.
In the battle of public perception, fights between businesses that place the consumer squarely in the middle does nothing to help either business. While there may be a clear winner in court, the true winner will be the side that manages to connect most with the consumers who will feel it in their wallets no matter who wins.
At 5WPR we defend the right of any business to practice as they see fit under the law. We also recommend that companies never lose sight of the public perception that allows them to continue to thrive