RENEE MONTAGNE, Host:
Congress is looking at credit card fees - again. This time, not the ones paid by consumers, but by merchants. New Hampshire Public Radio's Jon Greenberg has more.
JON GREENBERG: Carolyn Mooney and her son own Hope's One Stop, a convenience store in a small strip mall in Merrimack, New Hampshire. Mooney says many of her customers are having a tough time weathering this recession.
CAROLYN MOONEY: Those people that rush in on a Saturday or Sunday morning to get milk - instead of buying a gallon they tend to buy a half-gallon. Everyone is downsizing.
GREENBERG: But as her average sale amount goes down, the set fee goes up. Her customers' buying habits are squeezing a bottom line that's already under pressure.
MOONEY: On the cost of a five dollar purchase item, we lose a dollar of that sale.
GREENBERG: According to the New England Convenience Store Association, twenty New Hampshire stores shut down last year. Card fees might not be the owners' biggest headache, but an extra thousand or five out the door is tough to manage these days. Controlling the cost of plastic is particularly frustrating because the world of card fees makes the Byzantine Empire look like a meeting of the local PTA.
JACQUES BRETON: Let me back up for a minute. I need to probably tell you how this industry is structured.
GREENBERG: One of the most lucrative for the banks - and most expensive for the merchants - is the rewards card, the ones that offer free air miles and things like that. The money for those rewards comes from the merchants, through these interchange fees. And, says Breton, the banks push these cards heavily.
BRETON: I've seen financial institutions that had a standard credit card, no bells and whistles, turn around and offer to their good customers a reward card so as to increase the interchange level - make more money.
GREENBERG: Nessa Feddis, senior counsel for the American Bankers Association, says the card business is extremely competitive and merchants like Carolyn Mooney should take advantage of that.
NESSA FEDDIS: There are many service providers out there. Sometimes they can be cheaper, but she should shop around.
GREENBERG: Feddis says credit and debit cards are convenient and merchants should expect to pay their fair share for providing that service. For his part, Breton, who, remember, is in the business of selling this service, has his own strategy to ease the burden on merchants.
BRETON: At my regular retail establishments that are friends of mine. I pay cash. I give them a check.
GREENBERG: For NPR News, I'm Jon Greenberg in Concord, New Hampshire.
(SOUNDBITE OF MUSIC)
MONTAGNE: This is NPR News.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.