Natalie Smigel’s Op/Ed (Stage 212) about merchants paying for credit card “rewards programs”

Dear Editor,

I would like to invite local businesses to join me in a campaign to call for change in the
credit card industry. I am the Business Manager of a local nonprofit that accepts credit
card payments. Recently, I was shocked to learn that as a merchant, we are charged extra
fees that fund the incentives and rewards that credit card companies offer their
consumers! If merchants check the statement from your credit card processing company,
you will see a recurring fee called “Interchange Fees”. This fee helps the major credit
card companies fund the free miles, points, and rewards that they promise their
consumers. Merchants are forced to pay higher fees when a customer uses one of these
reward cards.

In my experience, basic math shows that this fee is roughly .02% of the total charges for
the month, however not all will have been made with a rewards card. Since my statement
doesn’t show the total for rewards cards only, I have to assume the percentage is actually
higher. Perhaps .02% does not seem like much. For sales during our biggest month last
year, that equates to 23 event tickets that we sold… which went straight into the pockets
of credit card companies for promises they made to their consumers. We did not promise
these consumers anything for using their credit cards. We also did not charge our patrons
for using credit cards. Keep in mind, that this is only the interchange fee. We pay other
fees for the processing of those cards as well.

Personally, I feel that it is extremely unfair that credit card companies make promises and
offer incentives to get their consumers to charge, charge, charge… and then expect us
merchants to pay for their promises. They argue that it entices consumers to spend more
so that they can rack up points and that it benefits us in the end. Well, in my situation, I
think I can confidently say that no patron has ever ordered an extra ticket just so they
could earn a few more miles. However, they very well may choose to use a credit card
that offers incentives over another card, so that they can get the rewards. I’ve done this
myself. However, now that I know it will cost the merchant extra when I use a rewards
card, I think twice. That fee probably won’t harm Wal-Mart, but it can be detrimental to
small businesses and nonprofits.

I urge local merchants to take the time to contact all of your state and federal elected
officials to ask them to help force some regulation of these unfair fees. The U.S. has
higher interchange fees than any other country. I have not yet determined which
governmental agency would help merchants, as most are set up to protect the consumers
that use the credit cards. I did lodge on online complaint with the Consumer Financial
Protection Bureau at and would urge others to do
the same. It would be great if the News Tribune did some investigative reporting and
could let us know exactly who we could contact to campaign against this abuse of
merchants. Meanwhile, we can start with our elected officials. Please join me in my

Natalie Smigel
Peru, IL

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