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Credit card purchases hurting retailers
06/20/2008 04:59 PM
By: Deborah Tuff

The National Retail Federation points out that gas stations are paying more in interchange fees because the price of gas has gone up. But the cost of processing credit or debit cards has stayed the same.
HOLLY SPRINGS, N.C. – When Wake County gas station owner Chadrakhan Patel looks at his books, he sees that in the past five months he's had to pay more than $16,000 in credit card interchange fees.


"It is very frustrating," he said.


A store owner pays an interchange fee when a customer uses a credit card. At about a rate of 2 percent -- the percentage paid to a credit card company stays the same. However, the dollar amount changes depending on the good or service.


In Patel's case that service is gasoline and in-store snacks. That means that high gas prices for folks like Patel result in little profit.


"We're probably making $6,000 dollars per month on the gas profit," Patel continued.


Credit Card Fees
When Wake County gas station owner Chadrakhan Patel looks at his books, he sees that in the past five months he's had to pay more than $16,000 in credit card interchange fees.
The National Retail Federation points out that gas stations are paying more in interchange fees because the price of gas has gone up. But the cost of processing credit or debit cards has stayed the same. Last year, credit card companies got a paycheck of more than $7.6 billion from store owners.


The profit for convenience store clerks is less than half that number.


And for Patel those stats are the reason his shoppers have to have a minimum credit or debit card purchase. He's also looking at giving cash customers a discount on gas.


"It still is not going to work out as well, because people… lots of people are using credit cards," Patel concluded.


Other stations across the nation are a little stricter. They're accepting cash only.







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