by Kitty Kiefer, Board Member
Credit card fees – I have to admit I hadn’t really thought about them until August. I was in a Zoom meeting with other Board Members and staff from Co-ops around New England, sharing ideas and information. I asked if other Co-ops had thought about the effects and amounts that credit card companies had collected from us and other retailers. We all began to discuss what we knew, and began to realize that paying these fees was largely optional, if our consumers were aware of the fees.
Banks and credit card companies collect “swipe fees” – usually around 2.25% of the transaction. That amount is shared mostly with Visa or Mastercard, with some going to the bank issuing the card, and occasionally some going to the consumer (by an increased swipe fee) in the form of “points” or other rewards. Swipe fees are set by Visa and Mastercard. (this is from NPR’s Up First newsletter, 9/26/23)
At our Co-op, the Owners have a perk called an Owner Tab which is the reverse of a charge account. An Owner can make a deposit on their Tab with a check or cash, to by-pass the swipe fees, and then buy whatever they are getting by spending what they have on deposit. I try to put on my Tab chunks of cash – $150 or more at a time – so that when I want to grab lunch from the hot bar or café I don’t use my credit card.
Nationwide, since 2020, the amount retailers pay in fees has increased by 50%, according to Doug Cantor of Merchants Payments Coalition, a lobbying group seeking to reduce these fees. The Co-op has informed consumers that we like to make choices about the products and foods that we buy. We read labels.
I asked Jessica Bosworth, our GM, for the gross sales amount and attendant credit card fees for the last full quarters – October 1, 2022 through September 30, 2023. During that time the Co-op has had gross income of $13,140,838. Attached to that gross income are $211,949 in swipe fees. I want to include, though, a thought about this from Devorah Sawyer, the editor of the Scoop and Marketing Manager for the Co-op:
Though it is thousands of dollars per quarter, and not paying that to the credit card companies would be awesome, I do also want to add that as far as credit card fees goes this is a healthy number (the average range is 1.5%-3.5%, and we're steady at 1%) and that's likely due to the number of people who use their Tabs or pay some other non-card way. I think that illustrates that Tabs do help.
So we, the informed consumers, can make choices. The more we support the Co-op and other local businesses with reducing the fees paid to credit card companies and banks, the better for our local businesses. If you aren’t yet an Owner, join us and activate your Owner Tab. If you are already an Owner, please consider using your Owner Tab, or cash or check, to pay for your purchases. This is one cost of doing business that we all can work together to reduce.
