A US retailer has warned his British counterparts of the effect that excessive credit card fees could have on their business.
Scott Hartman, CEO of the 50-strong Rutters Farm Stores, told a delegation of UK retailers and manufacturers at the NACS exhibition in Atlanta, Georgia, that card fees were "the devil" for the convenience sector.
"It's a huge, huge problem," he said. "We pay more in fees than we make in profit." The largest component of this is the interchange fee, which is charged by the cardholder's bank to the retailer's bank and passed on to the retailer.
NACS chairman Sam Turner identified the fees as the US convenience industry's number one issue in his opening address at the show. "We made $4.8bn last year, but the credit card industry made $6.6bn from our industry," he said.
Store owner John Clark, a visitor to the show, explained how the issue affected him. "I can get a 35-40% margin on a pop and candy bar sale," he said. "Take into account payment with a credit or debit card, which is becoming a preferred method of payment, and the margin is 9%. I get to take 18 cents to the bank instead of 85 cents. I should have started a credit card company."
NACS president Hank Armour added that the US convenience industry had made some progress in limiting rate increases. "There is no battle we are more committed to than this," he said.
The British delegation attended NACS as part of a trip organised by the ACS. It also included a study tour of outlets in Washington DC and Atlanta.