NRA, merchants take swipe-fee fight to Supreme Court

The National Restaurant Association (NRA) continues to battle for fair debit-card swipe fees for restaurateurs and other merchants.

Along with a coalition of merchant groups and businesses, the NRA has asked the U.S. Supreme Court to hear its appeal of a January U.S. Court of Appeals ruling that upheld the Federal Reserve’s rule allowing card issuers to charge some merchants inflated debit-card swipe fees.

The coalition filed its petition with the Supreme Court on Monday, August 18. The court isn't expected to announce whether it will hear the case until January.

The NRA has been fighting exorbitant swipe fees for years. The coalition argued in its brief that the 21-cents-per-transaction limit the Fed imposed on debit-card swipe fees violates the 2010 Durbin Amendment passed by Congress that called for fees that are “reasonable and proportional” to the cost of the transaction.

The Fed initially proposed a 12-cent cap, but raised that to 21 cents in its final rule.

The Fed’s own research has shown that 90 percent of debit-card transactions cost less than two cents to process. The coalition estimates that the Fed’s final rule is costing U.S. merchants an extra $4 billion in swipe fees each year, compared to the cap the Fed initially proposed.

The coalition won the first round of the legal battle in July 2013, when U.S. District Court Judge Richard Leon ruled that the Fed’s swipe-fee regulations violated congressional intent by allowing inflated transaction fees, especially for merchants with low-ticket transactions. However, in January, a three-judge panel in the U.S. Court of Appeals overturned Leon’s ruling and upheld the Fed’s final rule.

The Food Marketing Institute, National Association of Convenience Stores, the National Retail Federation, Boscov’s Department Store and Miller Oil Company are the other members of the coalition.

Study finds cutting debit fees put $86 billion in La consumer's hands in 2012; $38 billion in merchant savings

A new economic report released today by the Merchants Payments Coalition shows that debit card swipe fee reform saved consumers and merchants billions of dollars in 2012, as anticipated by Congress when it passed debit reform legislation in 2010.

According to the study the result of the debit form legislation was $86 billion in Louisiana consumer savings and $38 billion in savings for Louisiana merchants. The study estimates that 551 jobs were created in Louisiana as a result of the debit card swipe fee reduction.

Reducing the cost for merchants to swipe debit cards put $5.8 billion back into the hands of consumers through lower prices, which led to sufficient increased spending to support 37,501 new jobs, the report finds.

"The facts are in and the numbers don't lie. Debit reform is helping consumers, and both consumers and the economy are big winners," said MPC Chairman Mallory Duncan, senior vice president and general counsel of the National Retail Federation. "Debit card swipe fees are eating up less of consumers' purchasing power, and that has yielded significant savings. These are long-term benefits that will steadily boost the U.S. economy."

Credit card rule changes: More to surcharging than meets the eye

Visa and MasterCard are sounding the alarm that America’s businesses are going to start tacking on millions of dollars in surcharges in coming months for guests who pay by credit card.

But the National Restaurant Association thinks that’s a tactic to draw attention away from the real issue: The fact that card companies have a stranglehold on merchant swipe fees and don’t want American consumers to know that they’re already paying billions of dollars in hidden swipe fees. These are fees that America’s small businesses can’t control or negotiate, and that keep climbing year after year.

In a narrow-margin business like restaurants, every penny counts. America’s nearly 1 million operators do their best every day to keep prices low and value high for their guests.

Few restaurant guests know that card fees are one of the five fastest-growing expenses for restaurants, even as technology brings down the costs of processing. These costs get passed along to everyone who dines at a restaurant.

The NRA hasn't seen signs that many restaurants are looking at surcharges in the wake of recent rule changes from Visa and MasterCard allowing such charges. (But if you’re a restaurateur thinking about surcharges, here’s a caution: The card companies’ new rules that took effect Jan. 27 are complicated. Know the fine print before you move forward.)