July 10, 2009
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News: 7-Eleven Lobbies for CCFF Act
A new proposed bill is causing quite a stir among retailers and banks. The Credit Card Fair Fee Act will enable retailers to be a part of negotiating interchange fees with banks and credit card companies as well as require better transparency measures between the three entities. Interchange fees are the fees retailers pay whenever a customer uses a debit or credit card. Many retailers have joined the lobby to get the bill passed through the House and Senate. The latest power packing group to join the lobby consists of over 6,000 7-Eleven store owners. The convenience store chain announced they are circulating a petition this week in support of the bill. Their plan is to collect 1 million customer signatures to deliver to Congress this fall. Many of the 7-Eleven franchise owners say they will be keeping the petition on their store counters and soliciting signatures from all customers swiping their cards for payment.
Representatives of 7-Eleven say they work on a very low margin and many customers make minor purchases using their debit or credit cards. The average purchase at one of their stores is approximately $6. Partner that with an average 2% interchange fee and a low margin, 7-Eleven stores have a very difficult time balancing the budget. According to Keith Jones, director of government relations at 7-Eleven, the total chain paid over $160 million in debit and credit card interchange fees last year; a 300% increase during the past five years.
Card networks such as Visa and MasterCard actually set the fees that they share with the merchant's bank and the credit card issuing bank. They say that if interchange fees were lowered, other bank transaction fees would need to increase to make up the lost revenue. The American Bankers Association maintains that the interchange fee percentage rate has not actually increased during the past years, but rather consumers are using their cards more and more to make every day minor purchases.