Retail group hopes state lawmakers fix "swipe fees" - KWWL - Eastern Iowa Breaking News, Weather, Closings

Retail group hopes state lawmakers fix "swipe fees"


Stores are staying busy with the rush of last-minute holiday shoppers.  As fewer people now carry cash, many of those purchases are being made with credit or debit cards.  But not all businesses accept plastic payment, mostly because of the high "swipe fees" banks charge them when cards are used, which have climbed 180 percent in the past decade.  But there's a new push to get those fees reduced.

It doesn't cost you any more to use a credit or debit card to buy something, than if you just paid in cash.  But businesses that accept cards get charged big "swipe fees"--anywhere from two to six percent of the purchase price.  Federal legislation passed to help lower fees two years ago, but it didn't solve the problem for many small businesses.  So some are now calling for state laws to help fight the fees.

Hansen's Dairy in Hudson has never accepted credit cards for retail purchases.  The cost of letting customers swipe has just been too prohibitive.  But as more people turn to plastic payment, the dairy is looking to change its policy. 

"If we can implement accepting of the cards without increasing our prices to pay for it, we're going to go with it.  We're assuming we'll have an increase in purchases to generate income to pay for use of the cards," said Jay Hansen, owner of Hansen's Dairy.

Scratch Cupcakery in Cedar Falls knows full well it isn't cheap to take credit cards.

"You know, we're just careful.  Fees go up everyday.  We haven't increased the cost of our product in three years.  We try not to do that.  So it just comes from elsewhere.  Maybe next year marketing won't be so much or something else to cover some of those fees," said Natalie Brown, owner of Scratch Cupcakery.

But allowing customers to use them, does help drive business.  In fact, a whopping 60 percent of the store's customers use plastic payment.  But because of the cost to allow such payment, Brown would love to see lawmakers tackle card swipe fees to keep her costs down.

"I think any time a fee is down, it benefits the small business owner.  We're all just kind of trying to make it work, especially during the holiday season, we might see 10 customers or a thousand.  So you have to plan for anything that'll happen.  So yeah, lower fees absolutely could benefit all of us I think," Brown said.

The Iowa Retail Federation is pushing state lawmakers to take a look at limiting swipe fees banks can charge. It's lobbying for a bill that would ban them from charging fees on the part of the transaction that covers state taxes.  It's targeted at limiting the burden on small businesses in particular.  The group believes fewer fees would only help companies grow and expand in Iowa. 

Groups of legislators in both the Iowa house and senate are reviewing proposed swipe fee legislation, but some believe it would be difficult to enforce, since some transactions are done with customers in different states.

Powered by Frankly