WASHINGTON— Credit card swipe fees that President Donald Trump calls the “out of control Swipe Fee ripoff” could cost consumers more than $683 million in higher prices this Valentine’s Day, the Merchants Payments Coalition said.
“For restaurants, swipe fees are anything but a love story,” MPC Executive Committee member and National Restaurant Association Director of Technology and Innovation Policy Brennan Duckett said. “On one of the year’s biggest dining holidays, these excessive fees raise costs for restaurant operators and for every couple trying to enjoy a special night out. It’s time for Congress to show some love to small businesses and their guests by passing the Credit Card Competition Act.”
Consumers are expected to spend an average $199.78 on Valentine’s Day items such as candy, flowers, jewelry, greeting cards and meals and entertainment this year for a total of $29.1 billion, according to the National Retail Federation’s annual survey. Based on the average 2.35% rate for Visa and Mastercard, that would include an average $4.69 in swipe fees — as much as a typical Valentine’s greeting card or three pieces of chocolate from a mid-range gift box — and would add up to $683.9 million if all purchases were made with credit cards. With swipe fees constantly rising, that’s up from $621.5 million last year, MPC said.
MPC contended that Valentine’s Day spending will give banks and card networks “lucrative” profits as they take a percentage of each purchase made with a card. A $160 “Classic Love” red rose bouquet can include $3.76 in swipe fees. The swipe fees on a $64 box of chocolates amount to $1.50. A $200 dinner for two can run over $5 for swipe fees on the meal and tip, and a $50 bottle of wine or champagne adds another $1.17 in swipe fees.
The biggest swipe fee cost is for couples getting engaged. BRIDES magazine says couples spend an average $6,000 on a one-carat natural diamond engagement ring, which would include a swipe fee of $141, MPC noted.
By category, swipe fees could account for $164.5 million of the $7 billion consumers are expected to spend on jewelry, $148 million of $6.3 billion spent on evenings out, $82.3 million of $3.5 billion spent on clothing, and $72.9 million of $3.1 billion spent on flowers.
“Exact figures are difficult to calculate because not all purchases are paid for with credit cards. But about 75% of in-person purchases are made with plastic, according to the Federal Reserve, and card industry rules make cash discounts difficult. Online, nearly all purchases are paid for by debit or credit card, and swipe fees are even higher for virtual payments than in-store payments — including restaurant take-out orders paid for online. (Three-quarters of restaurant orders are consumed elsewhere),” MPC said.