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The cardholder agreement states that the annual membership
fee is nonrefundable and is paid in consideration of opening an
account and establishing a credit limit. Petitioner performed
all of the acts that it was required to perform in order to be
entitled to the annual membership fee when it issued a credit
card to the customer and established a credit limit. Petitioner
does not deny that it can cancel a member’s credit card at any
time, or that its rights and obligations are anything other than
as stated in the cardholder agreement. Once petitioner opened an
account for a customer, petitioner had an unrestricted right to
that customer’s annual membership fee. Petitioner had no duty
under the agreement to return any part of the fee even if
petitioner or the cardholder closed the account immediately
thereafter.
Petitioner contends that it received the annual membership
fee in payment for numerous services it provided to cardholders
throughout the year. Petitioner’s contention might be well taken
if we disregard the cardholder agreement. Under the agreement,
all that petitioner was required to do to be entitled to keep the
nonrefundable annual membership fee was to issue a card and
establish a credit limit. Respondent contends that those actions
are not within the scope of Rev. Proc. 71-21, 1971-2 C.B. 549,
because they are not services. We need not decide respondent’s
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