By Ethan Gibble
Last year Congress passed financial reform legislation which, among other things, required "reasonable" debit card fees. In December, the Federal Reserve proposed capping these swipe fees at 12 cents per transaction--a significant drop from the previous average of 44 cents per transaction. Every restaurateur knows what kind of financial investment swipe fees can be, with the annual fee accumulation for some smaller operations nearly matching their annual payroll expenses.
With the Federal Reserve's regulations due to take effect by July 21, lawmakers have begun submitting bills to Congress to delay this change by up to two years.
Yes this is a hot button issue, but whether it is a "$12 billion gift to retailers" or if a delay would be just another banking bailout isn't what's on my mind right now. What I'm considering, restaurateurs, is what you could do to benefit your business if / when the regulations take effect.
With all of the savings on swipe fees, might it be time to draw more customers in by re-evaluating your menu's pricing? Or maybe you won't pass these decreased swipe fees onto your customers at all, but will instead pocket them as guaranteed savings. Of course you won't generate as much positive publicity as you would by cutting prices, but it's certainly a viable option.
The idea of having one's voice heard seems to ring especially true today, perhaps because this is the day of Pennsylvania's primary election. In keeping with this theme, the National Restaurant Association is encouraging all restaurateurs to sign a petition to keep these reforms on track in the face of proposed delays. If you would like to reap the benefits decreased swipe fees and place value on the institute of petitioning, visit www.keepdebitswipefeesincheck.com to sign.
- Chris Dagger
The fees can be a killer, especially if it's a coffee shop operation like mine. The margin on coffee is very low anyway, and countless times I'm processing tickets for $1.44. 9c to the state, 32c to the merchant account provider, 10c for the cup, 20c for the cream, 50c for the coffee. If I'm lucky, I'll make 20c. We have just switched to a provider who offers zero swipe fees and a low percentage, so it's not all bad!
- Brian Montgomery
Chris, great suggestion about shopping around for providers! As a non-cash carrier myself, I think it's great that you've gone out of your way to let people like me pay with a card, even for small purchases! Some places I've gone to force a minimum purchase if I want to pay with a card.