C-Stores Prepare New Anti-Interchange Petition Drive

Retailers fighting what they say are high payment-card acceptance costs are not letting the heated debates about health care or President Obama's planned troop surge in Afghanistan push interchange off the political stage. The NACS?The Association for Convenience and Petroleum Retailing, next week will launch what it calls Phase 2 of a petition drive to keep the interchange issue before Congress. The drive, which will run concurrently with Congress's recess that ends in mid-January, aims to replicate the success that leading convenience-store chain 7-Eleven Inc. had last summer in its anti-interchange petition drive?a drive the NACS spokesperson calls Phase 1. 7-Eleven presented nearly 1.7 million signatures on anti-interchange petitions placed in 6,300 of its stores over the summer (Digital Transactions News, Sept. 30). That was a record petition for a single issue, according to the spokesperson for the Alexandria, Va.-based trade group. The NACS aims to get millions more signatures during the upcoming month. Some 8,000 operators have already agreed to place petitions in their stores, the spokesperson says. “We've been surprised at the number of people who have contacted us and said, 'I'm in,'” the spokesperson says. The association is making petitions available to the membership through a Web site, nacsonline.com/fightswipefees, where they can download a petition for printing and placement in their stores. The idea is to get consumers aware of the issue while their representatives and senators are in their districts and states. “They're going to be in their hometown stores,” the spokesperson says. The wording of the petitions will be very similar to 7-Eleven's and tries to be accurate in explaining how interchange affects stores without going on at length, he adds. The petition has a banner headline saying, “Please lend your neighborhood convenience store a hand!” It then says, “This store pays more in credit/debit card swipe fees than it makes in profits.” Data from a NACS study indicate transaction fees on average exceeded profits by 63% for c-store operators last year. The spokesperson says convenience-store operators are paying about 5 cents per gallon in interchange. Three bills that would regulate interchange or limit the bank card networks' ability to prevent merchants from steering customers to cheaper forms of payment are pending before Congress. The NACS says the petitions do not endorse any bill. The new NACS effort is certain to be opposed by the card networks and banks, which as card issuers are the recipients of interchange revenues. A spokesperson for the Electronic Payments Coalition, a group of pro-interchange networks and banks, did not immediately respond to a Digital Transactions News request for comment. Last week, a libertarian think tank, the Washington, D.C.-based Competitive Enterprise Institute, issued a report that argued strongly against government intervention into the payment card market. The CEI noted that cardholders in Australia are paying more card costs in the wake of strict government regulation of interchange that took effect in 2003. The report also criticized the efforts of 7-Eleven and other retailers to enlist consumers in their efforts to get Congress to pass interchange controls. “Especially misleading are merchants' claims that imposing price controls on interchange fees will be a boon for consumers,” the report says. “In fact, such controls would actually shift the costs of processing cards onto the backs of consumers, and undermine the significant, yet often hidden, efficiencies that payment cards deliver to consumers, merchants, and ultimately the American economy.” A recent report from the Government Accountability Office, the investigative arm of Congress, said that merchants' interchange costs have indeed gone up, but government regulation would be difficult to implement and could have unintended consequences (Digital Transactions News, Nov. 19).