Walmart is suing Capital One to break its credit card partnership. The retail giant alleges that Capital One is in breach of contract over specific account maintenance requirements to the partnership’s co-branded rewards card – the Walmart Rewards™ Card.
Walmart Sues to End Capital One Partnership
Walmart isn’t happy with Capital One. A report in the Wall Street Journal states that the box-store giant is looking to terminate its relationship with Capital One Financial Corp, with Walmart alleging the bank did not meet service obligations, failed to replace lost cards, and delayed or failed to post some transactions to customers’ accounts promptly.
At the heart of the disagreement is the Capital One® Walmart Rewards™ Card. The cash back card earns an unlimited 5% back at Walmart.com, including grocery deliveries and pickup. That 5% places the card on par with other box store rivals – Costco, BJ’s, and Amazon. With other purchases, the card earns an unlimited 2% back at Walmart stores and at Walmart and Murphy USA Fuel Stations, 2% back on dining and travel, and 1% back on all other purchases. The card features no annual fee.
Capital One Vows to Fight Back
The lawsuit by Walmart is just the latest incident in a running disagreement with Capital One. Previously, the retail brand sought to renegotiate the contract – with Walmart insisting on amending the partnership’s loss-sharing agreement and hoping to include its fintech neobank, ONE Finance, in launching future co-branded cards.
A Capital One representative told the WSJ it would “vigorously protect our contractual rights in court.”. Additionally, the company claimed that Walmart’s lawsuit “is an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago or end the deal early.” That deal is otherwise expiring in 2026 – although provisions exist for the contract to be extended.
Capital One is one of the largest issuers of retail credit cards in the US. It features co-branded Mastercard credit cards with Cabela’s/Bass Pro Shop, Pottery Barn, William Sonoma, BJ’s, and more. The bank took over the Walmart credit card portfolio after the retailer in 2019 after Walmart sued to break its agreement with the previous issuer, Synchrony. That lawsuit alleged that Synchrony’s underwriting practices resulted in financial harm and ended a twenty-year relationship.
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Featured image by Walmart
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