Businesses are hoping to get more bargaining power when it comes to how much they are charged to accept credit and debit card purchases.
The Credit Card Fair Fee Act (read the whole bill), was reintroduced this year and is now being discussed in Congressional committees. I first heard about it when I was buying an emergency breakfast at one of the various 7-Elevens that are sprinkled on my way to work.
They had a binder of papers on the counter and were asking for people to sign their petition. It seems that groups like the National Restaurant Association feel the credit card companies are treating them unfairly with a lack of transparency in the way they do business and arbitrarily raising fees.
Convenience store owner Bruce Mitchell said his operation paid out more than $3 million in credit card fees last year.
“I am paying 25 percent more for credit card fees than I pay in wages,” he said.
Business owners say that these fees, and their frequent increases, are being passed along to consumers in the form of higher prices.
What do you think? Should the “free market” sort it out, or do credit card companies have too much power?
Small business pushes credit card reform, Susan R. Miller, South Florida Business Journal, June 8 2009
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Please. The businesses are full of it. The only result of this getting passed (which hopefully it won’t) is that the businesses will pocket the savings, and the credit card rewards programs will get cut. That’s what happened when Australia decided to do the same thing. What makes anyone think the U.S. will be any different?
Passing the cost of credit card fees to consumers is nothing new in businesses.
If you are buying big items and want a discount, tell the merchant you’re paying by cash and ask for discount. You may get it.
And if you are going for carnival sales for IT products, the merchant will tell you upfront they are charging extra fees for the credit card usage. Illegal? Yes. But the merchant can’t afford to add cost to their low margin item.
Who to blame? Not sure.
But the consumers are willing to pay for the convenience. Carrying cash in bulk is too risky nowadays. Blame the society perhaps for creating a non-safe environment for cash transaction.
Laws and rules will only complicated matter futher. Just look at the recent credit card act. The bank has responded by jacking up the interest rate before it is implemented. The loser is consumer with good credit and behavior. So why should good citizens paid for the sins of a few bad apples who do not take responsibility of their own behavior?