Synchrony, Walmart Settle Their Legal Differences and Agree to Extend Business
In a sign that even burnt bridges can be rebuilt, Walmart and Synchrony Financial announced the end to their legal proceedings and that the two have agreed to continue their business relationship—albeit in a different capacity.
Back in November, Walmart filed a lawsuit against its long-time credit card issuer alleging that the company breached its contract and that the retailer was being harmed financially by their more than two-decade-old partnership. That suit, which was for damages of around $800 million, came around the time that Walmart informed Synchrony that it would replace the card issuer.
Despite what seemed like an irreparable relationship, an announcement shared this week would have us believe that the two are set on mending their broken bond.
According to the statement, the two have agreed to extend their business relationship with the Sam’s Club portion of Walmart’s portfolio by continuing to offer Sam’s Club members a store-branded credit card option. As part of that extension, Synchrony will continue to manage and service the credit card programs for more than 600 Sam’s Club locations.
But, perhaps the most significant portion of the Synchrony statement was the simple 11-word sentence that followed that news: “In addition,” they said, “Walmart has agreed to dismiss its lawsuit against Synchrony.”
"We are very pleased to have reached these agreements. Obtaining certainty around the Walmart portfolio and a renewal on Sam's Club is a great outcome for the company," Margaret Keane, president and chief executive officer of Synchrony, said in the statement. "Sam's Club is a valued and longstanding partner. We look forward to continuing to deliver innovative products and excellent customer service to Sam's Club members."
And in a sign of settling their differences, Synchrony also said it has reached an agreement on the sale of their Walmart loan portfolio, which they currently manage. That sale is expected to be completed and transferred over to the new lender during the third or fourth quarter of 2019.