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NEW YORK Riding a wave of public outrage over credit-card practices, 7-Eleven Inc. wants to show merchants are victims of the industry too.
The convenience store chain announced a petition this week asking that small businesses be given more power to negotiate the fees they must pay whenever a customer uses a credit or debit card. 7-Eleven said more than 6,000 of its franchisees nationwide plan to collect 1 million customer signatures to deliver to Congress this fall.
George Clift, who owns a 7-Eleven in McKinney, Texas, said he's asking customers to sign whenever they pay with plastic.
“We just want to let our customers help us, (to) see if Congress can get involved,” Clift said.
Clift said he pays about $28,000 in credit-card fees each year, which he notes is “a huge number for a small businessman.”
Still, Visa and MasterCard warn that if such fees were lowered, banks would need to make up any lost revenue with higher credit and debit card fees.
The petition from 7-Eleven comes after sweeping reforms to credit-card practices were signed into law by President Obama in May. The law gives consumers new protections on interest-rate hikes and cost disclosures, but does not include rules on fees paid by merchants.
It's this seeming discrepancy that 7-Eleven wants addressed. The company is hoping to generate support for legislation that would establish a negotiating process for determining the so-called “interchange fees,” said Keith Jones, director of government relations at 7-Eleven.
Interchange fees, generated when a customer uses a credit or debit card, are typically between 1.2 and 2.2 percent of the transaction, according to industry publication Card & Payments.
7-Eleven says the fees are more burdensome to small businesses as more people use plastic to pay for even minor purchases. These days, Jones noted that it's not unusual for people to buy gum or cup of coffee with a credit or debit card. The average purchase at 7-Eleven totals $6, he said.
“If you're a very low-margin business, that kills you,” Jones said.
Last year, Jones said 7-Eleven paid $160 million in bank card fees, up from $40 million five years ago – a 300 percent increase.
Interchange fees generated by bank cards totaled about $24 billion last year. That money is split between card companies, the merchant's bank and the card-issuing bank.
