Arlington, VA — February 21, 2007 — The Food Marketing Institute (FMI) applauds Sen. Arlen Specter (R-PA), ranking member of the Senate Judiciary Committee, for visiting a Giant Food Stores supermarket today in Camp Hill, PA, to learn from his constituents about the hidden and costly impact of credit card interchange fees.
"We appreciate Senator Specter’s leadership investigating these fees and learning about their impact where they hit consumers directly: at the checkout lane in retail stores," said FMI President and CEO Tim Hammonds. "He presided over a Judiciary Committee hearing last July that exposed the antitrust issues raised by interchange fees. His visit today shows he is serious about resolving these issues."
Interchange fees totaled $30.7 billion in 2005, up more than 17 percent from 2004 and up 85 percent from 2001. These are fees credit card companies charge retailers for every transaction that involves one of their cards.
"Unfettered increases by the credit card companies continue to raise the cost of doing business and must stop," said Carl Schlicker, president and CEO, Giant Food Stores.
"Interchange fees mean that American consumers pay a hidden cost on virtually every purchase," said Hammonds. "The cost is rising fast as credit card use increases and card companies compete by raising the fees that retailers pay to make it more profitable for the banks that issue their cards. The retailers and consumers who pay these fees have no say in this practice."
Interchange fees are assessed on every credit and signature debit card transaction, averaging close to 2 percent. Retailers are forced to build them into the cost of all transactions because card company rules prohibit surcharges on plastic payments and effectively prevent retailers from offering discounts to consumers who pay by cash or check. Credit card company rules make it virtually impossible to inform consumers about these fees.