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Avoid ATM fees: Grab cash at the register

Just askWant to avoid those pesky surcharges at the automated teller machine? Buy some stamps.

Starting in July, people will be able to withdraw as much as $50 from their personal bank accounts when they pay with the debit feature of their ATM card at any post office.

"They can kill two birds with one stone and there's no fee," said Elizabeth Schafer, a payment technologies officer at the U.S. Postal Service. "They make the post office their first stop. They buy their stamps, they get cash back and then go about their errands."

ATM surcharge:

Fee charged for a non-account holder to use bank-owned ATM.

Example: You have an account at Bank A but use Bank B's ATM. Bank B will charge you a surcharge. Make sure to review what your bank charges for to you to use another bank's ATM system. You may have to pay a surcharge to Bank B and a non-bank owned ATM charge to Bank A.

First effort was big hit
A pilot program in 129 offices in the Dallas/Fort Worth area proved to be so popular with customers and so cost-effective for the post office that it decided to offer cash back at all of its 32,000 locations. The post office will be offering debit-paying customers cash back in $10 increments with a maximum of $50.

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The cash back offer is limited to customers who use a personal identification number to activate their debit cards. Cards that require a signature are not eligible. They almost never are.

More merchants are offering the cash back option as a way of cutting down transaction costs. And more and more consumers -- searching for ways around dreaded ATM surcharges -- are discovering the convenience of getting cash back.

ATM surcharging started on a national basis in April 1996 when MasterCard's Cirrus network and Visa's Plus network lifted bans on the practice, which allows banks to charge non-account holders fees for using a bank-owned ATM.

Customers want that cash
Many bank customers have been seething ever since. To avoid paying charges, they have learned to stick to their own bank's ATMs and to pay with the debit feature of their ATM cards. And they're beginning to ask for cash back.

And experts say consumers would be wise to request cash back wherever available.

Most banks charge non-bank customers for ATM use, and they typically do not charge a fee if their cards are used at the cash register, said Alan P. Pohlman, executive vice president at Carmody & Bloom, a Ridgewood, N.J.-based consulting firm.

Supermarkets, gas stations and stores like Walgreen's and Wal-Mart all offer cash back at the register when customers pay with debit cards. And experts say the amount of money available to customers at the register is on the rise.

Study: More than 30% of grocery chains give cash
A February survey by Carmody & Bloom of supermarkets from across the country reveals that one-third of the chains surveyed allow customers to withdraw more than $100 from bank accounts at the check-out line. Pohlman points out that just five years ago the maximum withdrawal was $25.

Wal-Mart offers its debit customers cash back in $20 increments with a maximum of $100.

"Retailers are recognizing that there is more demand for cash back particularly in light of ATM surcharging," Pohlman said.

Experts say getting cash back with a debit card is just beginning to catch on with consumers. But word is getting out.

Members of the West Coast-based No-Surcharge ATM alliance -- which boasts 430 financial institutions and more than 2,900 ATMs in 11 states-- encourage customers to pay with debit cards and to ask for cash back.

Getting the word out
Pulse EFT Association, which stretches across eight states throughout the South and Southwest, has provided financial institutions with 750,000 statement stuffers in the past three months that explain how customers can get cash back when they pay with their debit card.

"It's very handy and it's growing," said Cindy Ballard, executive vice president with Houston-based Pulse. "A lot of merchants are pushing this. Clerks are asking, 'Do you want cash back?' "

For merchants, it boils down to cash management.

"In our network we've been offering cash back for years and years. Merchants have latched on to it. It's money management for them. They're able to get cash out of their drawers." Ballard said.

Pulse Pay, the association's cash back option for customers paying with debit cards, is available everywhere from supermarkets and gas stations to convenient stores and fast food restaurants.

Growth is fast
Ballard also pointed out that association transactions in which customer used debit cards with personal identification numbers grew by 73 percent this year, and many customers are paying with debit to avoid ATM surcharges. Cash back is the next logical step.

"Consumers are smart," Ballard said. "They know how to use their ATM card at the point of sale and they're learning that cash back is an option."

How to Avoid ATM Surcharges

  • Use ATMs offered by your financial institution. Most are free.

  • Seek out surcharge-free ATMs.

  • Cut down on ATM visits by withdrawing more cash per visit.

  • Pay with the debit feature of an ATM card.

  • Ask for cash back when paying with debit cards at supermarkets, drug stores and gas stations. 

-- Posted: April 24, 1998

 

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See Also
More ATM news
ATM fees nationwide
How to reduce your ATM charges
Definitions of ATM and checking terms

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