GREENBELT -- Customers with Giant Visa credit cards will keep their rebates at least until Jan. 15.
At a U.S. District Court hearing yesterday, M&T; Bank NA voluntarily agreed to continue its credit card program with Giant Food Inc. until the middle of next month, when Chevy Chase Bank of Maryland might be ready to take over the program.
M&T; had told the Landover-based grocery store chain it would drop the 7-month-old program because it was losing money. M&T; senior vice president and general counsel Richard A. Lammert said in the courtroom yesterday that the bank is losing $25,000 to $35,000 a day.
Most of the 65,000 customers who have Giant Visa cards are using them for convenience and paying off the balances every month, Lammert said.
M&T; informed Giant in October it would discontinue the rebates for the credit card customers as of 11: 59 p.m. yesterday. But with only a day before the expiration of the program, Giant sought a temporary restraining order from U.S. District Judge Alexander Williams Jr., and the bank backed down.
Just before the hearing, Buffalo-based M&T; proposed to extend the program if Judge Williams would not put a restraining order on the bank.
"I am trying to avoid the negative implications of a temporary restraining order," said Williams.
Giant welcomed the action by M&T; with a legal handshake across the aisle during the court hearing.
"I think we certainly are gratified we have the agreement of all parties to keep the program in place," said Terry A. Gans, Giant's vice president of advertising and sales promotion. "It's what we wanted all along."
But the two parties remain far from friendly.
Giant filed a $40 million lawsuit against M&T;, contending the bank had no legal right to pull out of its five-year contract.
The bank wants the issue taken to the American Arbitration Association in Syracuse, N.Y.
Phillip Shatz, an attorney representing M&T;, said the bank would hand over all of its records on its credit card customers, including Social Security numbers and histories, to Chevy Chase Bank no later than tomorrow in order to speed the transition of the card program.
Whether Chevy Chase will be able to put together a program within a month is unknown.
"Chevy Chase is going to do all it can to have this up and running as fast as it can," said Gans. "It seems like a very short time."
In fact, Chevy Chase and Giant have no signed agreement.
Chevy Chase officials were not available to comment yesterday.
Judge Williams told the sides to come back on Jan. 15, and he will re-examine the issue of a restraining order.
The credit card gives a rebate redeemable at Giant for purchases made at the food store and elsewhere.
Customers, who do not have to pay an annual fee for the card, received an unusually hefty rebate: 3 percent on purchases made at Giant and 1 percent on purchases made at other stores.
Chevy Chase will offer the credit card customers the same deal, Giant said.
Pub Date: 12/11/96