Walmart, the world's largest retailer, has filed a lawsuit against Capital One, one of its credit card partners, for allegedly breaching the terms of their agreement.
The lawsuit, filed in a Southern District of New York state court, accuses Capital One of violating confidentiality provisions and failing to adhere to agreed-upon marketing practices. According to the lawsuit, Capital One improperly disclosed confidential information about Walmart's financial performance to its competitors, including Amazon and Target. The lawsuit also alleges that Capital One failed to provide adequate marketing support for Walmart's credit cards, resulting in a decline in sales.
Walmart and Capital One entered into a partnership in 2018, with Capital One taking over as the issuer of Walmart's credit cards. The partnership was seen as a strategic move for both companies, with Walmart gaining a powerful ally in the credit card industry and Capital One gaining access to Walmart's vast customer base.
However, the relationship between the two companies appears to have soured in recent months, with Walmart accusing Capital One of violating the terms of their agreement. The lawsuit seeks damages for breach of contract and fiduciary duty, as well as injunctive relief to prevent Capital One from continuing to disclose confidential information. It also alleges that Capital One did not meet its customer service standards and failed in at least "five critical service areas."
According to Walmart, Capital One failed to give members replacement credit cards within the necessary five-day window and did not post transaction or payment information to members' accounts consistently. In the lawsuit, Walmart claims that Capital One admitted to not meeting the service standards.
In an emailed statement, Capital One told employees and stakeholders that they were willing to renegotiate the terms of its partnership with Walmart or end the deal before it expires in 2026. Walmart has already publicly expressed a plan to move on and open a new credit card option for its customers in the coming year.