Petitions set out to fight credit card fees
Published 12:00 am Monday, December 28, 2009
While waiting to pay for her soda at a local gas station, Ami Winn read a sign asking for her signature, and she obliged because, she said, she understands there is an issue at hand.
Credit cards are a convenience for customers, but not for convenience stores who must pay fees not required when customers pay cash.
So Winn signed, joining others nationwide supporting the stores’ fight against credit card companies.
In Vicksburg, nine Kangaroo stores owned and operated by The Pantry Inc. began the campaign Dec. 18 by posting signs on each gas pump and placing petitions inside on counters.
At the Kangaroo on U.S. 61 North, a manager said 396 signatures had been collected as of this morning. She said a lot of people who are signing do not realize fees are tagged onto each transaction. The fees amount to 2 percent or $2 per $100 that customers spend, but the stores insist that fraction claims too large a share of their narrow profit margin.
The North Carolina-based Pantry’s campaign leader, Scot Knox, said the company wants to collect 1.8 million signatures at its 1,600 stores through 11 states across the South during a monthlong campaign.
“We set that figure based on realistic goals per store,” he said. “That’s roughly 35 signatures a day per store.”
One convenience store owner in town who has not joined the petition still agreed credit card fees are burning his pockets.
“The fees are pretty high,” said Kenny Patel, who manages the counter at the Exxon on Halls Ferry Road. The stores are caught in the middle as Americans shift to a cash-less economy. “You have to have credit cards. It’s actually hurting us.”
Patel said the station posted signs in front of the cash registers in each of the family’s 12 convenience stores locally and in Raymond and Hazlehurst notifying customers there is a $5 minimum on all card transactions. The thinking is that fees eat up all profit on small purchases.
“We’re still in a loss by selling customers $5 (in merchandise),” he said.
According to the Association for Convenience and Petroleum Retailing, a Virginia-based nonprofit trade group that is leading the petition drive, credit card fees incurred by retailers have increased. Convenience stores nationwide paid $8.4 billion in fees in 2008, nearly tripling their share from sales since 2003, the association said. Other than the cost of goods and labor, the fees are the largest expense the smaller stores face — more than utilities, taxes and all other expenses. In 1995, the association said, 21 percent of sales were by credit card. That rose to 49 percent in 2008.
The association said it wants Congress to address the matter, but the House and Senate already passed one credit card fee reform package designed to limit some industry practices. Instead, the legislation has resulted in higher interest charges and fees for consumers, plus higher fees charged to vendors who accept the cards.
Jeff Lenard, vice president of communications at the association, agreed that credit card companies face expenses of technology, fraud and nonpayment by customers. “This is a complex issue,” he said. “The goal is to show that this is a big deal that they need to address.”
He said credit card giants Visa and Mastercard raised their usage fees to retailers in March nearly 300 percent.
Once a common practice in fuel sales was to charge credit card customers a few more cents per gallon than cash customers. That practice has largely ended and is seen as a highly unlikely alternative for sales at the counter, where more and more people use cards.
“It aggravates me,” Winn said. “A lot of people don’t carry cash.”
Winn, who frequently uses credit cards at convenience stores, said she has been directly affected and she signed because she knows the fees have an impact.
“At the place where I used to work, I was charged a fee each time I got a tip,” she said, referring to her job as a restaurant server. “It was 5 cents per $1. I didn’t understand it before because I thought it was part of the charge, but it’s not fair.”
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Contact Manivanh Chanprasith at mchan@vicksburgpost.com