Petition papers are showing up in convenience stores across the country as merchants try to solicit the support of customers to help them in their quest to lobby for lower credit card transaction fees.
Every time a credit card is used by customers for purchases, shop owners are charged a transaction fee by banks and credit card issuers. Disgruntled retailers are demanding that these fees be reduced, which would generally range from 1% to 2% per transaction.
The National Association of Convenience Stores (NACS), which represents grocery and convenience shop owners across the US, launched the signature campaign in Dec 15, 2009 and will end in Jan. 15, 2010.
Retailer Kangaroo Express, a member of NACS, said that credit card companies charge them 2% per credit card transaction. With a monthly transaction volume of 1.5 million, the fees add up substantially, hurting their profits. In turn, some of the costs are passed on to consumers, resulting to more expensive goods. The company wants to negotiate for lower swipe fees so that they could offer cheaper products to customers.
Credit card transaction fees now represent Kangaroo Express's third largest expenditure after labor and rent. The company is targeting to collect as much as 1.8 million signatures in their signature campaign.
The Senate and Congress have acted on the issue by submitting pertinent legislation that is currently being deliberated by lawmakers.
Congressional bills H.R. 2695 and S. 1212, both named Credit Card Fair Free Act were created to allow merchants and credit card issuers to negotiate for transaction fees.
Sanford Food Mart in Tramway, has so far collected 200 signatures. Om Desai, the store's manager explains that the fees are considered as overhead costs. He wants consumers to be educated about swipe fees and understand their implication on the costs of goods. He adds that the fees keep getting higher each year and they are struggling to keep the price of their merchandise down as a result. Desai is also planning to talk to Congressman David Price, who represents his district, to discuss with him the issues of local retailers regarding swipe fees.
Many stores are setting a purchase floor of $5 to customers so that they would not be too impacted by the credit card charges. Desai explains that most customers are sympathetic to their plight and willingly comply by their floor policy, but there is a handful that resents this practice.
He makes it a point to ask all customers who come in their stores for their signature to show support to their cause.