{"id":15310,"date":"2010-06-14T20:00:29","date_gmt":"2010-06-15T00:00:29","guid":{"rendered":"\/\/www.askmrcreditcard.com\/news\/?p=15310"},"modified":"2010-06-14T20:00:29","modified_gmt":"2010-06-15T00:00:29","slug":"consumerist-take-a-side-on-the-swipe-fee-debate","status":"publish","type":"post","link":"https:\/\/www.askmrcreditcard.com\/news\/consumerist-take-a-side-on-the-swipe-fee-debate\/","title":{"rendered":"Consumerist: Take A Side On The "Swipe Fee" Debate"},"content":{"rendered":"

I can still clearly remember the first time I found The Consumerist<\/a> web page.\u00a0 It was\u00a0 revelation that there was a web site entirely devoted to pointed yet snarky advocacy on behalf of consumers.\u00a0\u00a0 On the day I first found The Consumerist, I must have spent hours going back through their archives.\u00a0 Although they seem to have lost their Consumer focus lately (“Does Your Neighborhood Need An Adults-Only Swimming Pool?<\/a>“), I still find time to read them every day.<\/p>\n

Wrong Turn On Swipe Fees<\/strong><\/p>\n

One of the great things about The Consumerist has always been their complete immunity to corporate propaganda.\u00a0\u00a0 While the rest of the media is mollified by the suggestion that a company is “taking your concerns seriously,”\u00a0 The Consumerist is the first to call BS and dig a bit deeper beyond the company line.<\/p>\n

That is why it is so disappointing to see The Consumerist <\/em>does not have a clear picture of the swipe fee debate.\u00a0\u00a0 Take a look at their latest post on the subject, “Why Don’t I Get The Cash Discount For Gas When I Pay With My Debit Card?<\/a>”\u00a0\u00a0\u00a0\u00a0 Here, the author, Laura Northrop comes to the correct conclusion that “Swiping a card, credit or debit, will always cost merchants money<\/strong>, no matter what kind of account the money comes from on your end.”\u00a0\u00a0\u00a0 This is correct, the merchant pays the swipe fees, not the consumer.<\/p>\n

At the bottom of her post, Laura was kind enough to list other articles in which The Consumerist has considered the nature of swipe fees, and sadly, the authors of those articles have contradicted her.<\/p>\n

In this post, The Hidden Fee That Happens Every Time You Swipe Your Credit Card<\/a>, Ben Popkin claims that “over the past 10 years, while the technological costs of processing transactions has gone down, interchange fees have more than doubled? A cost that then gets passed on to you in the form of higher prices.”\u00a0\u00a0\u00a0\u00a0 This is not the full story.\u00a0\u00a0 In fact, you can read my post <\/a>where I found that even the claim that only half of the cost of swipe fees are passed on to the consumer is probably way too high.<\/p>\n

Unfortunately, Phil Villarreal<\/a> swallows the corporate propaganda hook line and singer when he says “A business executive interviewed in the story says as things now stand, businesses are forced to pass credit card fees on to all customers.”<\/p>\n

The truth is that retail prices are set by the market, and do not bear a direct correlation with swipe fees or any other cost of doing business that a retailer faces.<\/p>\n

In his article, Senate May Break “Price Fixing” On Credit Card Swipe Fees<\/a>, Popken glosses over many of the problems for consumers with the Durbin Amendment, yet fortunately he does point out that “it could mean less flexibility for consumers who like to use their cards for small purchases.”<\/p>\n

Why Swipe Fees Are Good For Consumers<\/strong><\/p>\n

I have a credit card with no annual fee.\u00a0 I pay for goods and services with it and at the end of the month, I pay my balance in full and it costs me nothing.\u00a0\u00a0 In fact, I get cash back or loyalty points in addition to all sorts of benefits that my credit card grants me such as rental car insurance and the opportunity to charge back purchases I did not receive.\u00a0\u00a0\u00a0 These benefits are not free as Ben Popken points out<\/a> “In other words, the Quickie Mart is paying for your “free” airline miles.”<\/p>\n

We as consumers, are also benefiting from the credit card network’s rules that say that retailers cannot set a minimum or maximum purchase requirement or charge a surcharge for the use of their cards.\u00a0 It is doubtful that credit cards would have gain acceptance in the absence of these rules.<\/p>\n

The retailers hate these fees to put it mildly. \u00a0 It costs retailers more every time we use a credit card instead of cash. \u00a0\u00a0 They like to think of them as a tax on all of their sales made through credit cards.\u00a0\u00a0 They pay the fees, not us.\u00a0\u00a0 That is why they are so opposed to them.\u00a0\u00a0 Make no mistake, if Durbin passes, we will pay more every time we use a credit card.\u00a0\u00a0 They want to shift the cost from retailers to consumers, it is that simple.<\/p>\n

What retailers don’t talk about is all of the benefits they get from credit cards.\u00a0\u00a0\u00a0 First they get the security, as credit card sales, unlike cash and checks, are immune to theft.\u00a0\u00a0 This is no small benefit for convenience stores and gas stations.\u00a0\u00a0 Next, the cost of the transaction is much less when they accept a credit card.\u00a0\u00a0 Think of swiping your card at the pump versus paying with cash at a gas station and you can see how the labor costs to a business of accepting cash are significantly higher. \u00a0 There are other costs of handling cash from counting registers, to making bank deposits to employee theft.<\/p>\n

There is no doubt that most people do not pay their credit card balance in full every month, and that credit cards induce people to spend more, another benefit for retailers.\u00a0 Finally, the electronic nature of credit cards has enabled the explosion in internet shopping.\u00a0\u00a0 How often would you shop on a website that asked you to mail in a check or money order?<\/p>\n

In the end, the swipe fees provide value to retailers, otherwise they would not accept credit cards.\u00a0\u00a0\u00a0 Very little if any of the cost of the swipe fees is actually passed on to consumers, and savvy shoppers earn back more in rewards.\u00a0\u00a0 I, like most consumers will not be happy with the consequences of the Durbin amendment.<\/a><\/p>\n

I urge The Consumerist to get it’s facts straight and oppose this terrible giveaway to retailers at the expense of consumers.<\/p>\n","protected":false},"excerpt":{"rendered":"

I can still clearly remember the first time I found The Consumerist web page.\u00a0 It was\u00a0 revelation that there was a web site entirely devoted to pointed yet snarky advocacy on behalf of consumers.\u00a0\u00a0 On the day I first found The Consumerist, I must have spent hours going back through their archives.\u00a0 Although they seem […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[13],"tags":[],"yoast_head":"\nConsumerist: Take A Side On The "Swipe Fee" Debate<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.askmrcreditcard.com\/news\/consumerist-take-a-side-on-the-swipe-fee-debate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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