7-Eleven Collects 1.6 Million Signatures Against Credit Card Fees
7-Eleven Inc. has recently announced that their petition drive, “Stop Unfair Credit Card Fees”, has garnered 1.6 million signatures. According to officials of the company, the result of the petition is an overwhelming referendum calling for Congressional action.
The announcement is the result of a recent drive of 7-Eleven franchisees across the United States numbering in the thousands lobbying for support from their customers which ran from June 22 to August 10. These neighborhood stores were asking their customers to sign a petition calling for legislation to be passed by Congress that would stop credit card networks and banks that issued credit cards from charging retailers with unjust transaction fees.
The issue regarding interchange fees is a hot one and the arguments between retailers angry about unfair transaction fees and credit card issuers insisting that transaction fees are necessary and fair has been escalating. Both sides have argued their points publicly, trying to gain popular support for their causes by buying newspaper ads, conducting studies supporting their stance and even releasing YouTube videos.
Interchange fees are fees charged on retailers whenever that retailer accepts a transaction using credit cards. They are not transparent to the consumers. The interchange fees add a percentage to the cost of the transaction. The added on cost is ultimately charged not only to customers who use credit cards but to those who don’t as well. American convenience stores paid 68% more for transaction fees than they earned in profits according to the 2008 State of the Industry study from the NACS (National Association of Convenience Stores).
The cost of interchange fees in the United States is usually $2 for every $100 credit card purchase. Because convenience stores typically handle smaller purchases, they usually get hit by much higher rates. For instance, if a convenience store accepts a $1.00 purchase from a customer, it will be charged $0.20. That means that 20% of the transaction that the merchant accepts goes to the credit card user. The rules for transaction fees are solely determined by the credit card issuers. Merchants are also required to accept credit cards for all transactions and they are not allowed to set a certain minimum amount of sale for credit card use which could help alleviate the cost of transaction fees.
President and CEO of 7-Eleven, Joe DePinto said, “Consumer response to this grassroots petition drive exceeded expectations. Customers share our frustration over the hidden fees that American retailers and, ultimately, consumers are forced to pay. They too want Congress to take action to regulate these unfair fees, which are the highest in the industrialized world”.
