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subsidiaries, but charged higher fees to the other banks. See
supra note 5. BCS did not track costs by individual cardholder.
Beginning on October 1, 1980, petitioner started to charge
each cardholder an annual membership fee (sometimes referred to
simply as annual fee) of $15, irrespective of the cardholder's
credit line, usage, or account balance, if any, carried over from
month to month. At that time, petitioner's major competitors
were charging between $15 and $18 for such annual fees.
Normally, a customer could not become, or remain, a cardholder
after October 1, 1980, without payment of the annual fee,
although bank managers had discretionary authority to waive the
annual fee for certain customers. Those cardholders who chose to
discontinue use of their cards on or before October 1, 1980, were
not charged the annual fee and could pay off their existing
balances in accordance with their previous agreements; no
replacement cards were issued to such discontinuing cardholders.
For the years involved in this case and for some further
period of time after the fee was instituted, the annual fee was
refundable to the cardholder if the card was cancelled for any
reason.6 The refund was a prorated amount of the annual fee,
based on the number of months remaining in the 12-month period
for which the annual fee was charged.
Also beginning in October of 1980, some new services for
6 By April of 1983 the annual fee became nonrefundable.
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