Idling in checkout lanes across the state, Maine consumers rarely ponder whether to fork over card or cash. And there’s little reason to, since the price is the same either way.
But that’s not true for small business owners and merchants.
Every time you brandish a plastic card, your bank collects an average 85-cent fee, whereof a fraction is passed along to the card network, such as Visa or MasterCard, while the bank retains the rest.
Multiplying pocket change by the number of card transactions yields the $42 billion figure that banks collect annually because of such swipe, or “interchange” fees.
Curtis Picard, the executive director of the Maine Merchants Association (MMA), said that these earnings come at the expense of small businesses, and ultimately, ordinary consumers.
“The merchants that really get burned are the ones that do small transactions,” he explained.
“The margins on a lot of items are often so small that when you’re talking about an 85 cent transaction fee on a $1.50 soda, the retailer is often better off giving away the product for free.”
At Island Treasure Toys, owner Jim Demetropoulus resorts to that unusual tactic.
“If someone wants to put $2 on a card, we’d actually lose money, so we literally give some items away,” he said. “We just tell them to take it and come back another time with cash if they think of it.
“And it doesn’t help that the fees keep going up,” he said.