Battle Cry Against Credit-Card Fees

Industry making progress in interchange fight, said Armour; Oneslager on advocacy

CHICAGO -- "There has been no bigger battle and no more important one than our fight to reduce the outrageous credit-card fees that we pay," said NACS president and CEO Hank Armour during the NACS Show 2008's Opening General Session. And, based on the progress made and the pressure the industry continues to put on the issue, "2009 looks to be the watershed year in which we may finally get significant relief," he added.

"This is the biggest issue that our industry has faced in decades, and we've taken it head on," said Armour. "With the tremendous help and support of many of you, we made [image-nocss] a lot of progress this year." The Credit Card Fair Fee Act was successfully passed out of the House Judiciary Committee (H.R. 5546), and the legislation was also introduced in the Senate (S. 3086), he said.

"We obviously have the credit-card companies' attention," said Armour, referencing some of the public relations stunts that Visa and MasterCard attempted this summer to deflect attention away from the issue of interchange. "While Visa and MasterCard claim they have fixed the problem, they haven't. The only thing they fix—and they continue to do so—is the price."

"Honestly, advocacy was never one of my passions," confessed Balmar Petroleum president and NACS 2007-08 NACS chairman Richard Oneslager during his NACS Show Opening General Session address. "But advocacy is one of my passions today, and for one simple reason: Credit-card fees are destroying our industry."

Oneslager introduced attendees to a credit-card fee "ticker" that will run throughout the NACS Show, a physical manifestation of what the industry's $7.6 billion paid in credit-card fees in 2007 looks like per second. Just a few minutes into his presentation, the ticker already topped $100,000.

Despite challenges over low gas margins and high credit-card fees, Oneslager said that the convenience and petroleum industry is poised for continued success because it delivers what consumers want. "We offer them convenience. We save them time. We simplify their lives. We offer them comfort," said Oneslager. "That is why we are well positioned, in good times and bad."

Two areas, in particular, present retailers with opportunity, said Oneslager. Foodservice, when executed well, can help many retailers make up for poor motor fuel margins and redefining why people come to our stores. And there is a growing importance of what he called the "refreshment shopping occasion." Today, nearly 40% of the industry's gross margin dollars come from beverages—whether packaged beverages, beer or dispensed beverages, particularly coffee.

"I joined NACS because of the value I saw in gaining knowledge—such as what the hot growth categories are—and making connections with other retailers experiencing the same challenges I face," said Oneslager.

But, he stressed that advocacy is essential. "I would be letting you down, not fulfilling my duty as chairman, if I let you walk out of here today with the belief that running a good business, paying NACS dues, and attending the NACS show is enough. It's not," he said. "We are in a battle for our future [with credit-card fees], and it requires all of you to rise up and take action," he added.

Changing the existing situation with the credit-card companies "will require you to take action," he stressed. "We are not going to be able to outspend the credit-card companies, so we are going to have to outwork them. Like many of you, I always came to the NACS Show to take things—to take a look at new products and services, and take home ideas that can grow," added Oneslager. But as more retailers get engaged in advocacy, "you will allow us to take control of our own destinies. And that is the most important takeaway of all."

The National Association of Convenience Stores (NACS) is the international association for convenience and petroleum retailing, representing more than 2,200 retail and 1,800 supplier member companies. The U.S. convenience store industry, with more than146,000 stores across the country, posted $577 billion in total sales in 2007, with $408 billion in motor fuels sales.