Trade Association Letter to U.S. Senator Dick Durbin Regarding #SwipeFees

 

http://durbin.senate.gov/public/index.cfm/files/serve?File_id=9586ad49-a109-40ae-b312-e1283b42e804

May 10, 2011

The Honorable Richard Durbin
Majority Whip
United States Senate
Washington, DC 20510

 

Dear Senator Durbin:

 

Our associations represent virtually every part of the retail industry selling motor fuels in

 

the United States. Like many Americans, we are concerned about the price of gasoline today.  Not only are rising prices bad for our customers, but when the price of gasoline rises, retailers make less money. That might not make sense at first glance, but the retail sale of gasoline is extremely price competitive. Retailers put their prices on large signs that motorists can see as they drive. Studies have shown that customers will drive out of their way just to save one or two cents per gallon. As a result, when the wholesale price of gasoline rises, retailers cannot raise prices to consumers fast enough to keep pace.

 

This is one of the many reasons why the swipe fees paid by our industry are so offensive.

 

Swipe fees are fixed centrally by the credit card giants for both debit and credit cards as a fixed fee plus a percentage of the transaction. That means the fee retailers pay to sell gasoline goes up every time the price of gasoline goes up. While gasoline retailers make less money on rising prices, they pay higher and higher fees. That simply is not fair.

 

With gasoline nearing $4 per gallon, debit swipe fees average about 6 cents per gallon –and credit swipe fees are about 8 cents per gallon. Our customers worry about every extra penny they pay for gasoline and 6 to 8 cents extra is far too much money. To put these huge fees in perspective, consider that every penny per gallon change in the retail price of gasoline costs consumers an additional $3.75 million per day or $1.38 billion each year.

 

The surest and swiftest way to reduce gas prices, however, is to let the Durbin amendment and the Federal Reserve’s rule implementing it take effect on time. Doing that will reduce the fees gasoline retailers pay, and the EIA definitively concluded in a 2003 report that gasoline retailers pass through 100 percent of cost reductions in the form of lower gasoline prices. That means lower debit swipe fees will lead to lower gas prices.

 

Senator Tester’s bill (S. 575) would do the opposite. It would stop swipe fee relief for two years and keep pushing up gas prices. That same 2003 EIA study found that cost increases get passed along in the form of higher gas prices. Therefore, a vote for S. 575 is a vote for two years of higher gas prices than anyone should be paying.

 

There are many reasons why reform is needed now to limit the price-fixing by credit card giants and banks on debit swipe fees. While some of those reasons might be subject to debate, it is hard for any of us in the business of gasoline retailing to understand why – given the pricing pressures we and our customers all face today – any Senator would vote for two years of higher gas prices when some relief is only a couple of months away. We urge you in the strongest terms to vote against S. 575, a bill that will keep gas prices too high.

 

Sincerely,

 

NACS – National Association of Convenience Stores

 

NATSO – National Association of Truck Stop Operators

 

PMAA – Petroleum Marketers Association of America

 

SIGMA – Society of Independent Gasoline Marketers of America

 

P&CMA – Petroleum & Convenience Marketers of Alabama

 

APMA – Arizona Petroleum Marketers Association

 

AOMA – Arkansas Oil Marketers Association, Inc.

 

CIOMA – California Independent Oil Marketers Association

 

CWPMA – Colorado Petroleum Marketers and Convenience Store Association

 

ICPA – Independent Connecticut Petroleum Association

 

FPMA – Florida Petroleum Marketers & Convenience Store Association, Inc.

 

GOA – Georgia Oilmen’s Association

 

HPMA – Hawaii Petroleum Marketers Association

 

IPM&CSA – Idaho Petroleum Marketers and Convenience Store Association

 

IPMA/IACS – Illinois Petroleum Marketers Association/Illinois Association of

 

Convenience Stores

 

IPCA – Indiana Petroleum Marketers and Convenience Store Association, Inc.

 

PMCI – Petroleum Marketers & Convenience Stores of Iowa

 

PMCA – Petroleum Marketers and Convenience Store Association of Kansas

 

KPMA – Kentucky Petroleum Marketers Association

 

LOMACS – Louisiana Oil Marketers and Convenience Store Association

 

MODA – Maine Energy Marketers Association

 

MPAMACS – Michigan Petroleum Association/Michigan Association of Convenience

 

Stores

 

MAPDA – Mid-Atlantic Petroleum Distributors’ Association

 

MPM – Minnesota Petroleum Marketers Association

 

MPMCSA – Mississippi Petroleum Marketers & Convenience Stores Association

 

MPCA – Missouri Petroleum Marketers and Convenience Store Association

 

MPMCSA – Montana Petroleum Marketers and Convenience Store Association

 

NCPA – Nebraska Petroleum Marketers & Convenience Store Association

 

NPM&CSA – Nevada Petroleum Marketers & Convenience Store Association

 

NEFI – New England Fuel Institute

 

IOMANE – Independent Oil Marketers Association of New England

 

FMANJ – Fuel Merchants Association of New Jersey

 

NMPMA – New Mexico Petroleum Marketers Association

 

ESPA – Empire State Petroleum Association, Inc. (NY)

 

NCPCM – North Carolina Petroleum & Convenience Marketers

 

NDPMA – North Dakota Petroleum Marketers Association

 

OPMCA – Ohio Petroleum Marketers & Convenience Store Association

 

OPMCA – Oklahoma Petroleum Marketers & Convenience Store Association

 

OPA – Oregon Petroleum Association

 

PPMCSA – Pennsylvania Petroleum Marketers & Convenience Store Association

 

SCPMA – South Carolina Petroleum Marketers Association

 

SDPPMA – South Dakota Petroleum and Propane Marketers Association

 

TFCA – Tennessee Fuel & Convenience Store Association

 

TPCA – Texas Petroleum Marketers and Convenience Store Association

 

UPMRA – Utah Petroleum Marketers and Retailers Association

 

VFDA – Vermont Fuel Dealers Association

 

VPCGA – Virginia Petroleum, Convenience and Grocery Association

 

WOMA – Washington Oil Marketers Association/Pacific Northwest Oil Heat Council

 

WPMA – Western Petroleum Marketers Association

 

OM

&GA – West Virginia Oil Marketers and Grocers Association

WPMCA – Wisconsin Petroleum Marketers & Convenience Store Association

 

CWPMA – Wyoming Petroleum Marketers and Convenience Store Association