Massachusetts Convenience Stores Protest Swipe Fees

Retailers in the state have called on their customers to help fight high interchange fees.

March 17, 2010

DUXBURY, Mass. - Customers at one of Leo Vercollone??s 24 gasoline stations get more than a tank full of fuel these days?"they receive an education on how interchange fees are hurting businesses like Vercollone??s, the Worcester Business Journal reports.

"It??s my biggest expense behind payroll," said Vercollone, president of Verc Enterprises. Vercollone has joined with thousands of other operators across the country to ask for Congress to change how credit card companies collect swipe fees.

One of the messages retailers are getting out there is that interchange fees take a big chunk of money from both big and small businesses. "We??re in a business of very small margins, pennies," said Joseph Petrowski, CEO of The Cumberland Gulf Group, which operates nearly 600 stores in close to a dozen states. "We live in a very competitive world, we post gasoline prices on our stores, our customers are literally mobile. If we??re not competitive, we can??t survive."

Interchange fees run between 1 percent and 3 percent of each transaction. With more customers paying with plastic, the cost for accepting electronic payments has risen.

Credit card companies say the fees are justified as part of doing business, the Merchants Payments Coalition, of which NACS is a founding member, does not buy that argument. Credit card swipe fees are three times what they were in 2001, raking in $48 billion in total U.S. fees two years ago.

"The rules right now are written by the credit card companies and they can change them at any time," said NACS Vice President of Communications Jeff Lenard. "And if you don??t like it, your only other option is (to go all) cash."

NACS estimates that a more competitive environment would lower fees between two and four times less than today??s rates. Currently, there are several bills before Congress on interchange fee reform. Check out the NACS Issue Page for more information.

Advertisement
Advertisement
Advertisement