NORTH JEFFERSON — North Jefferson County small business owners say they would be helped by pending legislation that would require a cap on debit card fees.
Jeff Higginbotham, a manager at Logan’s General Store in Hayden, said the store paid $42,000 in credit and debit card fees last year. Debit card swipe fees alone, which don’t include credit card fees or a one percent processing fee, cost the store $573.60 last month. He said the store is charged 20 cents per swipe; the proposed bill would reduce the fees the 12 cents or less.
Logan’s is both a general store and a gas station, and the business sees many card transactions a day. Higginbotham said gas prices have driven many customers to change from debit to credit because they simply can’t take the immediate hit to their bank accounts that comes with buying a tank of gas. Regardless, he said a limit on debit card fees would be a big help.
“Debit card fees can kill a profit on gas,” he said. Many banks charge one or two percent fees on the dollar amount of a transaction; Higginbotham said profit margin on gasoline is often a solid number, such as 10 cents on a gallon, and not a percentage.
In 2010, President Barack Obama signed into law reforms that were intended to lower debit card swipe fees as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, according to the Birmingham Business Journal. However, the bill’s execution was stalled after lawmakers decided more research was needed before the law was put into full effect.
Patt Smith, owner and operator of the Jet-Pep in Fultondale, said the bill would help her business as well.
“We get a lot of debit and credit cards,” she said. “It would help small businesses, and we need everywhere we can get it.”
She said the economy has made paying large debit card bills difficult.
“Banks need to take a hit,” she said. “Honestly, they issue these cards to some people who shouldn’t have them.”
Although she doesn’t impose the rule, she said some businesses won’t allow customers to make a purchase unless the bill is above a certain amount, usually $5 or more.
Evelyn Stathakes, who co-owns Our Place restaurant in Gardendale, said she doesn’t feel like debit card fees are a problem unless a customer uses it for a very small purchase.
“But, we’re a restaurant. We have to offer the service,” she said. “At least half of our customers pay with a card.” Stathakes said she is “all in favor” of the legislation.
Both Visa and Mastercard have issued press releases stating that the regulations would increase costs to cardholders and consumers in general, according to the Birmingham Business Journal.