In Their Easter Baskets, Retailers Can Expect to Find Exorbitant Credit-Card Swipe Fees

WASHINGTON--()--Americans will spend $16 billion this Easter holiday season, and many will pay by credit card, which means their banks will gouge merchants for each shiny new pair of shoes, chocolate bunny and bouquet of Easter lilies.

Most people are unaware that banks charge merchants between 2 and 4 percent, known as a “swipe” fee, every time customers use their credit card to buy something.

Every American who celebrates Easter this year will spend around $140, according to a study commissioned for the National Retail Federation that estimated sales of candy, clothes, brunch, flowers, greeting cards and the rest.

Four percent of $140 is almost $6 in bank swipe fees if the customer uses a credit card, even though each of those transactions costs the banks mere pennies to process.

It’s not just Easter. Banks gouge merchants this way every single day on every single card transaction. Why? Because retailers have no recourse: Visa and MasterCard each price-fix the fees their banks charge merchants. The credit-card business is not competitive, and merchants are stuck with these exorbitant fees if they want to accept cards.

And most consumers who buy with a card – anything from gas to groceries to clothing and everything else – don’t even know about this huge bite.

But every customer feels it nonetheless in higher prices. And so do merchants who – in contrast to the banks – operate in a highly competitive business.

Because retailing is so competitive, many merchants subsist on paper-thin profit margins of a few pennies on the dollar. These swipe fees for many have become their second-highest operating cost after labor – more than rent and utilities.

American merchants now pay the highest swipe fees in the world – as much as seven times what merchants in Europe pay.

That means unfairly high costs for merchants (and retailing is a huge industry whose health is critical to the economy) and, ultimately, higher prices for consumers. American families pay an estimated average of more than $400 a year in swipe fees.

If banking were like retailing, banks would set their own prices and compete in a fair, transparent system that would look more like the rest of our market-oriented economy.

But they don’t. So while you’re eating your chocolate bunny and admiring your new shoes this Easter, spare a thought for the merchants who sold you these things – especially the small, local stores you visit all the time – and the exorbitant, hidden fees that make doing business so much more difficult for them and their goods and services more expensive for you.

For more information about unfair credit-card swipe fees, go to the Merchants Payments Coalition website:

The Merchants Payments Coalition – at - is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses fighting against unfair credit card fees and for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores with approximately 50 million employees.


Merchants Payments Coalition
Michael Flagg, 202-253-4164


Merchants Payments Coalition
Michael Flagg, 202-253-4164