BJ’s Wholesale Club’s contract with ADS is set to expire this year, according to a lawsuit.
Photo: Scott McIntyre/Bloomberg News
Alliance Data Systems Corp. ADS -4.57% is losing one of its biggest credit-card accounts: BJ’s Wholesale Club BJ -1.38% Holdings Inc.
The members-only wholesale club is moving its co-branded credit cards to Capital One COF -2.17% Financial Corp., according to people familiar with the matter.
The move is a big blow to ADS, which specializes in store credit cards. BJ’s is among its most prized credit-card partnerships, accounting for roughly $1.5 billion in balances, according to people familiar with the matter. ADS had an average of $15.5 billion in balances during the third quarter, according to the company.
BJ’s on Tuesday sued ADS in Massachusetts Superior Court, claiming the company is slowing down the process of transferring the existing card accounts. Capital One’s name is redacted from the lawsuit.
An ADS spokeswoman said the allegations in the lawsuit are inaccurate. “Alliance Data has a 30-year track record of delivering the highest level of service and support to our valued brand partners, including operating responsibly and with the utmost integrity,” she said. “We believe we are in full compliance with the terms of our contractual agreement.”
More than a million BJ’s members have one of the cards, according to the lawsuit. BJ’s contract with ADS is set to expire this year, according to the lawsuit. In court papers, BJ’s said the delay is tied in part to ADS’s move to convert its existing technology platform, which stores card account information including balances, cycle dates and demographics.
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Appeared in the January 19, 2022, print edition as ‘BJ’s to Shift Cards to Capital One.’
