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In a new development from retailers, especially gas stations and convenience stores, are postings that discourage you from swiping your credit cards.
The retailers make varying profits with the profit being very minimal on small purchases. The “swipe fees” they incur each time they swipe the card is sometimes more that the amount they earn. To gain respite from such a situation, they are posting the “$5 minimum for credit” sign which is getting more common.
This move is not encouraged by credit card companies since they say that transaction minimums make consumers shell out more amount at checkout counters.
Credit specialist Laurie Zoock expressed his view on the situation saying “The fees can be enormous to shop owner”. He emphasized, “ They don’t want you to make small purchases with a credit card”.
While retailers vent out their anguish saying the hidden charges that they are charged in turn get cascaded to the consumers who have to bear the brunt of it, credit card companies are expressing their helplessness on the situation claiming that it is the minimum they can charge for the services they are providing.
Retailers receive tremendous benefits from accepting electronic payments”, claimed VISA in one of its statements.”In a recent survey..by a 2-to-1 margin, consumers said retailers should pay the cost of accepting credit and debit cards.”
The National Retail Federation (NRF) made a startling revelation that on an average, US citizens pay $400 a year as interchange fees. These are actually passed down to the consumers from the retailers.
“It’s probably the largest fee consumers have heard of”, echoed Mallory Duncan of NRF commenting about the situation. “Last year, many merchants discovered the credit card companies made more money off their business than the merchant was.”
St Petersburg business owner Liz Armas said “The fees are enormous. It’s like having another rent”
Armas is one of those exceptions who does not pass on the fees on to her customers, but she finds no relief from the high interchange fees that is forced on her by the credit card companies.
Other than the 2-3 percent of every sale, the retailers claim that they have to pay additional fees which will seem like a bigger amount when sales are small. While bigger retailers get the advantage of negotiating good credit contracts, small retailers say they lack the flexibility to do so.
