The Honorable Lawrence H. Summers
Assistant to the President for Economic Policy and
Director, National Economic Council
The White House
Washington, D.C. 20500
Dear Mr. Summers:
On behalf of the Main Street businesses serving as the nation's supermarkets and supermarket wholesalers, we applaud the White House for scheduling a meeting with major credit card issuers to rein in credit card company practices.
We would strongly urge you to also include credit card interchange fees in your conversations with the credit card company executives on Thursday.
Many businesses, like the customers they serve, are feeling a tremendous amount of pain that is not sustainable because of these unfair, uncontrollable and ever increasing fees.
Just this month, the credit card companies again raised the fees they charge businesses every time a card is used. For our members it is a roughly $5,000 per store increase in fees. In order to make up that magnitude of an increase, we would have to sell an additional $500,000 worth of groceries.
Credit card companies and banks extract an interchange fee averaging about 2 percent on every credit card transaction. The total cost of interchange fees tripled since the beginning of this decade, from $16.6 billion in 2001 to a $48.8 billion in 2008.
In the end, all consumers pay these fees — whether they pay by plastic, cash or check — because card company rules effectively force retailers to build them into the price of all goods and services.
This is outrageous behavior by Visa and MasterCard that must not remain unchecked.
We would be pleased to meet with you or your staff to discuss this in more depth.
Sincerely,
Leslie G. Sarasin Esq., CAE
President and CEO
Food Marketing Institute
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