This week, 7-Eleven franchise owners in Virginia will be coming to Capitol Hill to lobby Congress to urge their Representatives to implement swipe fee reforms that were passed in the 111th Congress. The Wall Street Reform and Consumer Protection Act, signed into law last year by President Barack Obama, included a provision that would regulate debit card swipe fees, and now, the current Congress is looking at either delaying or repealing these fees. According to The Hill, banks charge 44 cents per debit card purchase and this fee would be reduced significantly.
Dennis Lane, who owns a 7-Eleven franchise and spokesman for Reform Swipe Fees Now, remarked about the urgent need to implement the reforms:
“I’m fed up. On behalf of more than 5,000 7-Eleven franchisees, thousands of employees and millions of customers who supported our historic campaign to stop unfair fees, we are going back to Washington to hold politicians accountable for the promises they made, and ask for the protection of much needed swipe fee reform that would benefit real Americans.”
Another 7-Eleven franchise owner, Brian Bonfiglio of Virginia Beach, Va. said that if these reforms are delayed, then franchise owners “will have to keep bringing prices up to cover expenses.”
While the fees are considered excessive by retailers, the American Bankers Association has another take on the swipe card fee reforms. By implementing these reforms, there could be potential problems with the pressure on banks to cover fraud prevention fees.
“Furthermore, the Fed has not even addressed the actual cost of fraud losses, which are indeed borne mostly by banks. Retailers are guaranteed payment when they swipe a debit card and obtain authorization. Even in cases where there are insufficient funds in an account or the card is counterfeit, the retailer gets paid and the bank that issued the card suffers the loss.
While I see the points being made by the American Bankers Association, I also see the need for this reform for the sake of retailers, who have been struggling due to the bad economic climate. The price of acquiring goods have risen, and retailers know the risks involved with passing the costs along to the consumers. When the cost of something rises, people generally tend not to buy, unless it is a necessity. Right now, we need to restore the economy. If this legislation is stalled, this could cause harm to retailers, such as 7-Eleven, and could cause more unemployment in the end.