High Credit Card Swipe Fees Draining From Local Businesses

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Credit and debit cards are almost a necessity these days.

But with the convenience of a swipe comes the costly fees for businesses that accept them.

Since the 1950's the amount of credit cards in our wallets skyrocketed, and so has the amount businesses pay to offer plastic as a payment option.

Kelsi Swanson, Merchandising Manager of Open Harvest, says, "Last year it was a little over $40,000, this year we're trending toward about $50,000 worth of credit card fees."

At the Open Harvest Co-op in south Lincoln, credit card sales make up 65% of their business.

But interchange fees, or swipe fees, tied to those sales are the reason they're trying to convince their members to use cash or check.

Swanson says, "We'll never not accept a credit card, we ask that if you spend under $5 you use cash or check, but we won't refuse a purchase."

The $5 minimum is an effort to try to avoid the more than $40,000 fees the company accrued in credit card fees last year. A number that comes as quite a shock to customers.

"Wow that's a lot of fees. Did not realize that's how much they paid in fees," says Steven Bolli.

Bolli has been an Open Harvest customer for years. He understands the need for a voluntary minimum. "It's not that big of an inconvenience but it's very convenient when it is available."

Across town at the Marz Bar, they also understand the importance of offering credit.

Jason Ables, Marz Bar manager, says, "We can't be cash-only. We don't have a choice just because of the level that we provide in terms of service and product."

But that doesn't mean they wouldn't mind taking plastic sparingly.

Ables says, "We have customers that will charge one drink, so $3 or $4, it's a 25 cent transaction fee and 2%-3% depending on what card they use, it's quite a bit."

Swipe fees can range from business to business depending on service.

Brian Ridder, Senior VP of Business Development for First National, says, "There's a number of things that drive ultimately, the transaction fee. Generally, they're not expressed as a flat dollar amount, it's usually a stated percentage rate of transaction."

And if you're selling one cookie at a time, swipe fees can really add up. Just ask The Cookie Company.

Robin Beaver, Manager at The Cookie Company inside the Westfield Gateway Mall, says, "Most customers that come into our store are single-cookie buyers and at $1.25 per cookie, every transaction would cost us 15 cents."

It may not seem like a lot but then add a 2% fee and they'd lose 18 cents per cookie. That's why they accept cash or check. "We just feel that we can better serve our customers, get them in and out of here without using a credit card."

And judging by the cash in the drawer, running a swipe-less business isn't as bad as one might think.