At the end of the petition drive, which runs through August 10, 7-Eleven said it expects to deliver one million signatures to Congress, calling on them to stop credit-card companies from charging unfair, hidden transaction fees and to pass legislation empowering retailers to negotiate with credit-card companies.
"We have been unable to convince these companies to come to the table to negotiate fair fees," said Darren Rebelez, executive vice president and COO for the Dallas-based chain. "In order to survive and stay in business, our franchisees and licensees plan to make a significant, collective statement with this petition drive. With this unprecedented effort, Congress will hear the message of 7-Eleven's small business owners and our customers across the country loud and clear."
7-Eleven spokesperson Margaret Chabris told CSP Daily News, "We haven't counted signatures yet, but the indication is huge consumer support, because we had to order 5,000 more petition booklets for our stores." She added, "We are well on our way to the goal, if not already having passed it."
In response to 7-Eleven's petition, MasterCard released a statement: "Consumers signing 7-Eleven's anti-interchange petition should first ask themselves 'what's in it for me?' because experience shows that the answer would be higher fees and fewer benefits on their credit cards. The real beneficiaries would be the merchants who want to keep the many benefits of card acceptance, while shifting the cost to their customers."
What is in it, 7-Eleven said, is that "consumers could see lower retail prices if interchange fees were reduced."
The retailer disputed the benefits of card acceptance: "Not increased sales," it said. "No one drives more or buys more fuel because they get airline miles. Two-thirds of our transactions are not guaranteed (fuel island card sales), like MasterCard says. We, as an industry, accept cards as a convenience."
MasterCard continued, "7-Eleven is misleading its customer into thinking that a reduction in the store's cost of acceptance would lead to lower pricing. The real-life experience in Australia, where several years ago the government mandated a reduction in those fees, shows that consumers there are now paying as much as 77% more in annual fees to use their credit cards, and are receiving 23% fewer benefits, like points or airline miles; however, there is no evidence that merchants lowered any prices on products or services to reflect their lower acceptance costs."
Finally, it said, "MasterCard publishes all of its interchange rates online, allows merchants to offer discounts to encourage customers to pay with cash or other forms of payment and to display their costs of acceptance at the point of sale. We encourage 7-Eleven, as well as other merchants, to be as transparent about all of the costs that go into the pricing of products they sell in their stores, so that consumers have as much information as possible to make informed choices about the goods and services they purchase."
7-Eleven responded, "Interchange is posted on the web, but only after merchants fought for years to get it published. The retailer is allowed to discount for cash/check because the Truth in Lending Act now requires credit-card companies to allow discounting. But no discounting is allowed when a credit card with a lower interchange fee is used."
It added, "Retailers in the U.S. operate in a very price competitive environment. As costs increase, convenience stores must ultimately pass along price increases to consumers or go out of business. 7-Eleven's card-related costs have quadrupled over the last six years. If we cannot establish a fair pricing mechanism, these costs will continue to increase and be passed on to customers. The costs associated with reward and commercial cards are passed on to all consumers, even those paying with cash or lower cost debit cards. Offering cash discounts, as MasterCard suggests, has proven impractical in the real world of retail sales. Offering cash discounts would require separate pricing and is confusing to the consumer."
And Visa released its own statement: "Given the tremendous value 7-Eleven gets from accepting payment cards, including speed, convenience, efficiency, reliability and guaranteed payment, this latest effort is both puzzling and misleading. The fact is, like all retailers, 7-Eleven can exercise numerous point-of-sale options related to accepting payments, including offering discounts for cash or PIN debit, acceptance of only cash or checks or steering customers to other forms of payment. They can also negotiate their acceptance costs or offer private-label payment cards. Unfortunately, 7-Eleven has chosen to ignore these facts and instead is asking consumers to sign a petition that would ultimately shift 7-Eleven's costs of doing business onto consumers while 7-Eleven enjoys all the benefits of accepting electronic payments."
The retailer said, "Visa is trying to draw attention away from its practice of charging our franchisees and other small businesses unfair, non-negotiated and hidden transaction fees. Our customers are all too familiar with Visa's practices of charging unfair fees on their credit cards. They understand that Congress needs to finish the job and pass small business transaction fee reform, which is why customers are signing our petition by the thousands everyday."
Visa continued, "Retailers who are no longer content with paying their fair share for the efficiency and security benefits they receive from their payment network are asking Congress to regulate the credit and debit card payment industry in a way that would significantly and negatively impact consumers, especially those struggling in this time of economic uncertainty. If this overreaching and unnecessary intervention succeeds, it will likely lead to higher costs and reduced benefits as we have witnessed in Australia where free market approaches were rejected and consumers now pay higher costs for less choices and fewer benefits."
Meanwhile, Digital Transactions magazine, citing the National Association of Convenience Stores (NACS), said that 7-Eleven may soon be joined by at least two other c-store chains. These unnamed companies are readying efforts to rally customers in support of interchange regulation.
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