Block, 7-Eleven sign deal for loan check-cashing
H&R Block Inc. and 7-Eleven Inc. have signed a three-year agreement that enables Block customers to cash refund anticipation loan checks at more than 1,100 7-Eleven stores in the United States.
The companies first joined last year for the service, in which customers of Kansas City-based Block (NYSE: HRB) use Vcom kiosks at 7-Eleven stores to cash their loan checks. Block isn’t disclosing how many customers used the service last year, company spokeswoman Janine Smiley said Wednesday.
Convenience for Block’s and 7-Eleven’s customers prompted the three-year contract, Smiley said. No money changes hands between the companies for the service, she said.
Block customers pay a lower fee to cash their checks using the Vcom kiosks than they do elsewhere, Smiley said.
The self-service interactive kiosks are available 24 hours a day. Block customers can cash refund anticipation loan checks at participating 7-Eleven stores with kiosks in Arizona, California, Colorado, Florida, Oregon, Washington, Virginia, Texas, Utah, eastern Pennsylvania and Washington, D.C. 7-Eleven is the exclusive convenience store outlet that provides the check-cashing service for Block’s customers.
“H&R Block served 16 million clients in its retail offices in 2005, and many want immediate access to money for a reasonable fee without limitations on cashing their refund loan checks,” Rick Updyke, vice president of corporate business development for 7-Eleven, said in a written release Tuesday.
Updyke said the fees Block customers pay for cashing the checks typically are at least 20 percent less than fees traditional check-cashing outlets charge.
Employees at Block’s tax preparation offices promote the service to customers, and the company will display signs and distribute information about the service at its offices. 7-Eleven stores also will promote the service at its participating stores.
Block has had its share of legal trouble with its refund anticipation loans. In December, the company said it had agreed to pay $62.5 million to settle four state class-action lawsuits involving more than 8 million consumers related to the loans in West Virginia, Ohio, Alabama and Maryland, and potential claims in 22 other states and the District of Columbia.
Two other cases involving the loans are pending: a federal nationwide class action in Chicago, scheduled for trial on May 15, and a 1992 Pennsylvania case. On Jan. 27, Block said the court in the Chicago case had reduced the size of the class to an estimated 1.7 million clients served mainly in the 1995 and 1996 tax seasons. The initial plaintiffs’ case against Block had sought a class of about 17 million clients from 13 tax seasons.
In November 2002, the company agreed to settle a Texas suit involving the loans that cost it $25.7 million, or 14 cents a share, after taxes. A month later, Block said it had agreed to pay plaintiffs’ lawyers an additional $49 million in the case.
Dallas-based 7-Eleven operates and franchises more than 5,800 7-Eleven stores in the United States and Canada and licenses more than 23,600 7-Eleven stores in 17 other countries and U.S. territories. 7-Eleven stores worldwide reported sales of about $41 billion in 2004.
H&R Block provides tax preparation, financial, mortgage, accounting and business consulting products and services. The company had revenue of $4.4 billion in fiscal 2005.
Source: Kansas City Business Journal