During a Tuesday teleconference designed as a reminder of swipe fee reform significance and the need for the rules to be implemented, Lane explained swipe fees by way of a customer's purchase of a $1 newspaper--on which he makes six cents and might pay 28 cents in interchange fees, if the customer [image-nocss] pays with a debit card. "I would certainly not turn you away; it's not good customer service. But it would be less expensive for me to hand you the paper for free and say, 'Have a nice day'."
He said the fees are his second-highest expense, behind labor costs, and added, "More and more consumers every day come into our stores with plastic."
Lane also explained that the fees have been escalating rapidly, pointing out that in 2010, Dallas-based 7-Eleven paid $177 million in interchange fees, compared with the $40 million it paid in 2002. He added that 80% of the company's transactions are made with debit cards.
"Interchange fees are something I have no control over. If I don't like what the company that empties my dumpster or mows my lawn or plows my parking lot [charges], I can sit down and get bids. I can put myself in a competitive situation and get a better price. They are the only person in my world as a retailer that I cannot negotiate with."
The Wall Street Reform & Consumer Protection Act--H.R. 4173, also known as the Dodd-Frank Wall Street Reform Act of 2010--includes an amendment sponsored by Senate Majority Whip Richard Durbin (D-Ill.) that would require the Federal Reserve to set regulations resulting in "reasonable and proportional" swipe fees for debit cards.
During the press conference, which was held the day before the eighth public hearing on swipe fees, Representative Peter Welch (D-Vt.), who was instrumental in consideration of swipe fee reform in the House, said, "It's one thing to have a reasonable fee for good service. It's another thing to have monopoly pricing that ends up ripping off our consumers."
He added, "The bottom line is you've got to charge a fair price for the service."
Lane said, "This isn't just about 7-Eleven or the convenience store industry. This is about where you go to buy your coffee in the morning, where you buy your doughnut, your dry cleaner, your baker, the gas station where you buy your fuel or where you have your tires rotated. We made history, and I believe that Capitol Hill made it clear that they were going to support and protect retailers."
He also said, "The money that we save if this is allowed to stand unchanged and unchallenged will be ultimately passed along in a lower cost of goods, lower operating expenses and it will give us a better opportunity to support the community, better support our consumers and hire more people."
The teleconference was organized by the Merchants Payments Coalition, a group of convenience stores, retailers and small-business owners whose membership associations represent approximately 2.7 million stores and 50 million employees.
(Click here for previous CSP Daily News coverage of swipe fees.)
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