'Lower debit fees translate into gains', NRF hails study

02 Oct '13

4 min read

More also could have been saved if the Fed had structured the cap to avoid increases on small-ticket purchases, the report said. While the 21-cent cap was a reduction from the average of about 45 cents for most purchases, it was an increase from the average 16 cents on a $7.50 transaction, for example. Had small-ticket fees been capped at no more than their previous levels, merchants would have saved another $690 million and another 3,000 jobs could have been created.

The report estimated that retailers shared 69 percent of the savings with their customers, basing the calculation on earlier studies of how retailers typically pass on cost savings from vendors. The percentage came from a study of more than 23,000 cost reductions at 1,000 stores in more than 30 states.

The study looked at the macroeconomic impact of the debit savings rather than specific examples of how it was shared. But retailers have previously reported a variety of moves, such as debit discounts, reducing prices, avoiding price increases, holding larger or longer sales, and adding sales associates or expanding merchandise selection in order to improve customer service.

As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs – 42 million working Americans.

National Retail Federation

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