Make us your home page

Hidden credit card fees boost cost of consumer goods

WEST PALM BEACH — Hidden credit card fees called "interchange fees" cost consumers as much as $2 for every $100 they spend.

The credit card companies and their banks charge merchants the fees, sometimes called "swipe fees," every time a credit or debit card is used. Like every other cost of doing business, the fees, averaging about 2 percent, are reflected in the price of goods and services.

While Congress considers reform of merchant fees with House Resolution 2382, the Credit Card Interchange Fees Act of 2009, introduced in May, merchants are doing what they can to fight back.

Jean Ehrbar, owner of Wholesale Verticals in West Palm Beach for 29 years, wanted to do something to lower the fees that cost her several hundred dollars a month. But as a busy business owner, she didn't have the time to tackle it, couldn't decipher the complex processing agreements and didn't know where to begin.

Then she heard about Robert Livingstone, 24, president of West Palm Beach's Palm Beach Merchant Services, which he founded in January and which deals directly with credit card processors on behalf of businesses.

"Processing fees are one of the most painful things for a business. Home Depot called it one of their five largest expenses, and 7-Eleven has said it is paying more in processing fees than it's making in profit," Livingstone said.

With more than 150 rates of interchange and terms that are unfamiliar to most people, making sense of merchant account bills isn't easy. Rates vary by type of business and its volume, type of card and more.

Livingstone monitors his 200 or so clients' statements each month to make sure adjustments he negotiates are continuing and sends them a monthly executive summary of each statement that is easier to read.

"We see which types of cards are used the most. We look for patterns and find where the merchants are being overcharged," Livingstone said.

"We are constantly renegotiating. It's a process. The merchant does not have to worry about what they are going to see. We see their statements before they do. We don't charge unless we can save them money, then we take 50 percent of the savings," Livingstone said.

Fast facts

Extra credit

The truth about interchange fees:

• The fees are set by credit card networks Visa and MasterCard, but are paid by retailers to card issuers such as Bank of America and Citigroup.

• The reason some businesses prefer customers pay with a debit card and a PIN is that card processors charge merchants more for credit card transactions.

• A credit card with rewards, such as airline miles or cash back, costs a merchant more to process than one without rewards.

• A business, corporate or foreign card carries even higher processing fees.

Sources:, and National Association of Convenience Stores

Hidden credit card fees boost cost of consumer goods 11/23/09 [Last modified: Monday, November 23, 2009 7:36pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Palm Beach Post.

Join the discussion: Click to view comments, add yours

  1. Labor Department green-lights retirement savings rule

    Personal Finance

    WASHINGTON — A Labor Department rule that would set higher standards for the advice brokers give to retirement savers will go into effect June 9 without further delay, Labor Secretary Alexander Acosta said Monday.

  2. Report: CEOs got biggest raise since 2013 with Charter Communications CEO on top


    NEW YORK — The typical CEO at the biggest U.S. companies got an 8.5 percent raise last year, raking in $11.5 million in salary, stock and other compensation last year, according to a study by executive data firm Equilar for The Associated Press. That's the biggest raise in three years.

    Charter Communications CEO Thomas Rutledge -- whose company took over Bright House Networks last year -- was the highest paid CEO in 2016, according to a study carried out by executive compensation data firm Equilar and The Associated Press. 
[Associated Press file photo]
  3. For Gov. Rick Scott, 'fighting' could mean vetoing entire state budget

    State Roundup

    Every day, Gov. Rick Scott is getting a lot of advice.

    The last time a Florida governor vetoed the education portion of the state budget was in 1983. Gov. Bob Graham blasted fellow Democrats for their “willing acceptance of mediocrity.”
  4. Potential new laws further curb Floridians' right to government in the Sunshine

    State Roundup

    TALLAHASSEE — From temporarily shielding the identities of murder witnesses to permanently sealing millions of criminal and arrest records, state lawmakers did more this spring than they have in all but one of the past 22 years to chip away at Floridians' constitutional guarantees to access government records and …

    The Legislature passed 17 new exemptions to the Sunshine Law, according to a tally by the First Amendment Foundation.
  5. Data breach exposes 469 Social Security numbers, thousands of concealed weapons holders


    Social Security numbers for up to 469 people and information about thousands of concealed weapons holders were exposed in a data breach at Florida the Department of Agriculture and Consumer Services. The breach, which the agency believes happened about two weeks ago, occurred in an online payments system, spokesperson …

    Commissioner of Agriculture Adam Putnam on Monday that nearly 500 people may have had their Social Security numbers obtained in a data breach in his office.
[Times file photo]