WASHINGTON--(BUSINESS WIRE)--The following press release was issued by Merchants Payments Coalition:
Dr. Seuss’ Oh The Places You’ll Go has been chosen as 2015’s Read Across America Day book, celebrated this Monday, March 2nd. But as readers flock to their favorite independent bookstores to buy this classic, high credit and debit card interchange or “swipe” fees on merchants and consumers make Dr. Seuss’ Grinch seem a more appropriate selection, said the Merchants Payments Coalition today.
“Everyone knows the tough competition independent bookstore owners face in today’s market, but we also know our customers love to browse our shelves. Lower swipe fees would help us keep our doors open for book lovers and also reward our staff and even hire new staff members,” said Steve Bercu, owner of BookPeople, a community bookstore in Austin, Texas.
Banks and credit card companies charge merchants interchange or swipe fees every time their customers use their credit or debit cards for purchases. These impact consumers as well, costing on average $400 per household annually. The fees also are set in secret and have more than tripled since 2004 despite improvements in technology that are driving banks’ costs down and that, in a free market, should be lowering fees as well.
Instead, growing swipe fees are adding up to big numbers, especially for small businesses, such as independent bookstores revered by book enthusiasts nationally. Though they face strong competition, small bookstores make up 10% of the book market. According to the American Bookseller Association, the United States saw a 20% increase in the number of bookstores from 2009 to 2014, amounting to about 2,094 independent bookstores in 2014.
It’s hard enough for bookstores to compete with developing technologies like tablets and online retailing, but with the crushing effects of bank fees, the book of profit is shut on merchants from the start. According to the Retail Owner Institute, bookstores netted a 2.6% profit before taxes in 2014.
Meanwhile, banks mark up fees by 500% and higher, depending on the type of card. “This yields unconscionable profits for banks while fees become the second largest operating cost for many retailers and merchants”, said Doug Kantor, Counsel for Merchants Payments Coalition and attorney at Steptoe & Johnson LLP.
These unfair fees hurt consumers as well.
“Ultimately no matter what payment method you use—cash, credit, debit—you are paying more because of bank swipe fees. You can’t win. It’s time to turn the chapter on swipe fees, to a new, more transparent and competitive card system,” said Kantor.
A survey shows that Americans on average buy around 21 books a year. For every purchase by credit card, banks take a 2 to 4% cut in the form of swipe fees. Take Oh the Places You’ll Go, for instance. It’s a popular gift for high school and college graduates and now has sold about 10 million copies. The book costs $17.99. 10 million copies at $17.99 on credit would generate roughly $7.2 million for the banks in fees at 4%. The payment transaction only costs a couple of cents!
“Banks sit back and leaf through dollar bills as booksellers wonder where their last pennies went,” said Bercu.
Read more about debit and credit reform here: The Facts About Debit Reform and The Facts About Credit Card Swipe Fees.
The Merchants Payments Coalition - UnfairCreditCardFees.com - is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike.