Commentary
A Los Angeles Times article by Elizabeth Douglass relates how many convenience store operators are offering cash discounts to entice customers to use cash instead of credit cards. I found the following quote from Jeff Lenard, spokes for the National Association of Convenience Stores to be an eye-opener:
"Members of the convenience store group, which has sued credit card companies over the fees, paid $6.6 billion in credit card fees last year -- and booked $4.8 billion in profits, Lenard said. 'The credit card companies made more at our stores than our store owners,' he said, noting that most of the profit from gasoline goes to the refiners rather than service stations and convenience stores."
Of course, the article does not address whether or not convenience stores have off-set card expenses with increased sales that result from accepting credit cards, but I find it hard to believe that at least the premium convenience stores like Sheetz, Quicktrip, WaWa, and others haven't benefited greatly from increases in sales due to credit cards (and state lotteries!). They could, after all, refuse to accept credit cards.
Nevertheless, this is clearly a case of different elements of the banking industry working at cross-purposes, with credit card issuers jacking up fees at the same time consumer bankers are trying to ween customers off of cash and checks, which cost more for them to process.
For the full article, click here.
