retail news in context, analysis with attitude

The US Senate yesterday passed the Wall Street Reform and Consumer Protection Act, which includes a provision to reform credit and debit card swipe fees by requiring them to be reasonable and proportional to cost and allowing retailers to offer discounts to shoppers who want to use cash instead of credit. The bill is expected to be signed shortly by President Barack Obama.

Retailers have supported the bill because consumers have been paying more than $50 billion a year in hidden interchange fees to credit card companies and banks, which they maintain lead to higher prices for all consumers. Since these fees are hidden, consumers are unaware of the costs associated with their cards.

“This is a long-fought victory for supermarkets and their customers across the country. Our members' extensive work on this spans more than the past decade,” said Leslie G. Sarasin, president/CEO of the Food Marketing Institute (FMI). “These fees represent the only completely uncontrollable cost for retailers. Supermarkets and their customers will see the benefits of a system of reasonable and proportional costs in a competitive and transparent marketplace.”

“Today’s vote demonstrates the value of retailers engaging with their elected officials,” said NACS President and CEO Hank Armour. “This is why NACS exists - to help bring together the industry to amplify its voice and make a difference on issues important to all of us. Last year we said that 2010 would be the year that we achieve meaningful interchange reform if we can combine the power of skillful lobbying with dramatic grassroots activity. Through consistent engagement with Congress, combined with massive consumer petition campaigns, we have clearly seen that great things are possible when our industry is engaged.”

“This is a landmark step forward in protecting Main Street against the excesses of the banking industry,” said National Retail Federation (NRF) Senior Vice President and General Counsel Mallory Duncan. “Five years ago most consumers didn’t know these fees existed or that the banks were quietly taking billions of dollars out of their pockets. But today we have a bill on its way to the President’s desk that tells the big banks enough is enough. The days of big bank bailouts are coming to an end – Congress has clearly sided with Main Street businesses and their customers.”

The Merchants Payments Coalition, created to represent 2.7 million US businesses, released a statement saying, in part, “This historic legislation, which includes a crucial measure to reform unfair debit and credit card swipe fees, is a huge win for Main Street businesses and consumers across the country. Today, Americans can be proud of their elected officials for standing up and doing the right thing by passing financial reform and reining in the out of control swipe fees that have been crippling business owners and consumers alike.”
KC's View:
What’s the over-under on how long it takes the banks and credit card companies to figure out some new loophole or scheme that gives them a whole new way to screw around with consumers and retailers?

I’m thinking next Tuesday...but maybe I’m a cynic.