Utahns are asked to join 'swipe fees' fight

Utah gas stations and convenience stores this week joined a petition drive urging Congress to reform so-called credit card swipe fees.

Through mid-January they're asking customers to sign.

Nationally, more than 10,000 convenience stores have joined the petition drive. And John Hill, state director of the Utah Petroleum Marketers and Retailers Association, hopes for a big Utah response, as well.

The fees are a percentage of each sale rung up on a credit card that is paid to the card processors. Hill said five major banks control 80 percent of credit cards and set the fees.

"We have been approaching Congress for several years to try to require more transparency in allowing retailers to negotiate interchange fees with the bank. Until two years ago, (retailers) weren't even allowed to see all of the 1,500-page contract they signed," Hill said.

The fees themselves vary depending on card type, merchant size and other issues, but as much as 2 percent of what's put on plastic goes to fees. In 2008, Visa and MasterCard banks collected $48 billion in credit and debit card interchange, and Hill said the average American last year paid about $427 in the fees.

Large retailers like Walmart have more clout to negotiate lower percentage rates than individual retailers. Hill said gas station and convenience store owners pay some of the highest rates, especially because most customers buy gas at the pump with no signature, which means there's a bigger chance of fraud and thus a higher transaction fee.

For many years, he said, those collecting the fees have made more money on gasoline sales than the station owners do. It also rankles that the fee is for the total sale, so retailers are charged not only on the products, but on the taxes.

Doug M. Olsen, owner of Western Business Services, said fees can be negotiated. Visa and MasterCard set the interchange costs. Companies like his resell credit card processing to the businesses and make a small profit and the "how much" is negotiable. There are ways to manage the cost if you work with the processor, he said, but most retailers don't.

"There are a lot of things you can do to lower cost and increase security, but most have not had any communication since they signed up," Olsen said.

7-Eleven stores have already delivered nearly 1.7 million customer signatures urging Congress to stop unfair credit card fees, Hill said — "the most signatures ever delivered to Congress on a policy issue in American history." Organizers hope this drive will surpass that.

e-mail: lois@desnews.com