Consumers aren't getting any savings from government caps on the swipe fees that merchants pay banks when consumers use debit cards to purchase goods and services.
That's according to an updated report -- "Where's the Debit Discount?" -- issued again this year by the Electronic Payments Coalition, a Washington, D.C.-based organization of major banks, state bank associations and payment processing networks.
The report argues that consumers haven't paid lower prices since the Durbin Amendment took effect, despite "overwhelming evidence that the retail industry is experiencing significant savings," the EPC stated.
Retailers began paying lower fees to accept debit cards Oct. 1, 2011, due to the amendment, which was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The fees are capped at 21 cents per transaction, plus small additional extras for fraud losses and prevention.
The report, first issued a year ago, aimed to present evidence that customers weren't receiving discounts due to the swipe fee caps.
To make the point, identical baskets of goods were purchased in September 2012 and September 2013 during 32 shopping trips to 16 major-brand retail locations in five U.S. cities.
Thirteen of the retail locations had raised their prices or kept them the same and three had lowered prices. Overall, customers paid an average of 4.3 percent more for the same products, the report said.
"Despite retailer promises of lower prices, 81 percent of stores raised prices or kept them the same in the last year and many raised their prices far above the rate of inflation," the EPC stated.
Among the findings:
- The price of milk at a Walgreens in San Francisco increased 30 cents.
- The price of peanut butter at a 7-Eleven in Boston increased 20 cents.
- A hammer at a Home Depot in Portland, Maine, still costs $4.98.
- A Slurpee at a 7-Eleven in Washington, D.C., still costs $1.49.
- Macaroni and cheese at a Walmart in Washington, D.C., still costs $1.38.
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