Americans will spend about
Let’s say you put that
Doesn’t seem like much? Well, two things make it a huge chunk of the merchant’s profits flying right out the window.
First, many merchants – and especially grocers – subsist on a profit margin of less than 2 percent. So the banks may be earning more than the merchant on each sale. (That’s already true, for instance, with convenience stores that sell gas.)
Now let’s consider the bank side: That
The banks can do this because Visa and MasterCard control the overwhelming majority of the card market, and each illegally fix the fees at outrageous levels so they can lure more banks to their brand. Few consumers have even heard of these egregious fees.
Okay, so now you know. But you’re busy planning a barbecue for 10 people. Why should you care how the credit card market works or how much the banks gouge merchants?
Because merchants compete so fiercely that there’s little room to absorb these ever-increasing swipe fees. So merchants have to pass the cost on to consumers in higher prices. That means you pay more for chips and pickles and mustard and ground beef – and clothes, gas and everything else you buy so the big banks can fatten their profits. That’s true even if you didn’t use a debit or credit card.
These predatory fees hurt retailers, a huge chunk of our economy, which means the banks’ greed not only costs you more at the store but also weighs on our economy and holds down growth.
An economist who surveyed the modest reform brought by the Durbin Amendment, in which
Not to mention that the amendment saved consumers nearly
These fees grow every year, to the point where they are now many merchants’ second-largest operating cost after labor, before rent or utilities.
Swipe fees are seven or eight times what merchants pay in
It’s ironic that
Yet the banks continue to bully American merchants and load these unfair fees on retailers’ backs.
It has to stop. Outrageous swipe fees hurt our retailers, many of them small businesses. They hurt consumers and they hurt the economy.
So, as you fire up the grill, remember the plight of the merchant who sold it to you and the grocer who sold you the food. The big banks are reaching into their pockets – and yours – every time you pay.
And that’s bad for everyone.
For more information about unfair credit-card swipe fees, go to the
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