Yesterday's announcement that stores can now charge consumers a credit card processing fee was met with the predictable response. "Big banks are screwing us again!" was a common theme in the Twitter-sphere. "I'm never shopping anywhere that charges a fee" was also posted quite a bit. The overnight anchor for ABC even called it "Another blow to consumers". And we had the obligatory story of shoppers in the local malls saying they would likely buy less if they had to pay the fee.
The thing that everyone seems to have missed here is that a credit card processing fee has been charged for decades. It's just that until now, retailers weren't allowed to pass that along to the customer. Instead, stores would just spread the cost across all merchandise they sold--including that purchased by those of us that pay cash or use debit cards. Yet, as soon as everyone heard about "credit card fee" they jumped right into the "victim mentality" that is pervasive in our society today by reacting "Those greedy banks are screwing us again."
But I want you to ask yourself, why should the credit card companies cover the cost of your purchase and carry your debt for free? I'll grant you that the Electronic Funds Transfer systems used for nearly all plastic transactions are less labor-intensive than the old paper-based process (remember the old "slider" thing that gave you a carbon copy receipt?)--but there is still some expense to make the transaction happen.
And unlike the fees--I mean "taxes" of ObamaCare--the credit card processing fees are completely avoidable. We have this thing called "cash" that works just like a credit card--except it carries no fees to use it--and by spending it at the point of sale, you avoid interest payments as well. We also have debit cards, that are PIN protected and withdraw money directly from your checking account to pay the retailer. Those transactions are currently exempt from the processing fee (although if that were to change in the future, you can always go back to cash).
Unfortunately for many Americans, the options I just mentioned are not available to them--because it would require actually having the money to buy something BEFORE you go to the store. Their money is spent before they even get it--paying for all of the stuff they bought last month, or the month before that, or even a couple of years ago. For those folks, they will have to consider the most drastic option: STOP SHOPPING FOR NON-ESSENTIAL ITEMS FOR A WHILE.
There have actually been some retailers that have rewarded the cash shopper for some time already. Most notably, the Exclusive Company has always had a "cash price" and a "regular price" on their cd's and stereo equipment. Some gas stations have also had lower "cash prices"--below that posted on the signs by the street. And then there are the quaint few stores and restaurants that have NEVER accepted credit cards. They have been saving all of their customers money by never having to spread out those processing fees to all transactions.
All of this concern is likely for naught, none of the major retailers will add the credit card fee anytime soon--out of fear of losing a competitive edge. But as we have seen in the airline industry, as soon as one makes the jump and adds the fee, they will all get in the pool. And then we will have to hear about all those "poor shoppers" that are getting "ripped off" again.