In response to data that reveals gas retailers are reaping up to $1 billion in benefits from the Durbin Amendment at the expense of consumers, the Electronic Payments Coalition has launched a campaign encouraging consumers to speak out.
The “Where’s My Debit Discount?” website is part of the campaign and allows the American consumer to petition Congress regarding the Durbin Amendment, a provision of the 2010 Dodd-Frank Act that capped interchange fees — the amount a bank can charge a retailer to process a debit transaction.
A recent study by the EPC revealed that gas retailers save $1 billion annually as a result of the Durbin Amendment, yet consumers have not seen the savings passed along as promised by retailers when they made the case for the rule.
“Merchants are ready to pass lower swipe fees along to consumers in the form of discounts and other benefits as soon as reform goes into effect…” Mallory Duncan, a senior vice president and general counsel at the National Retail Federation, said.
While increased retailer savings should translate to increased savings for consumers in the form of lower prices, recent data shows just the opposite. A survey by Ipsos Public Affairs revealed that retailers have already saved $2.8 billion industry-wide, and research shows that 76 percent of retailers have either raised or kept prices the same since the Durbin Amendment took effect.
Some retail groups, however, claim that the current interchange rate is still too high and that neither retailers nor consumers have seen the benefits of the rule. Several merchant groups filed suit against the Federal Reserve in late 2011, alleging that the central bank’s final rule on interchange fees did not reduce the rate as much as stipulated by the Durbin Amendment. While the Federal Reserve’s final rule set the interchange cap at 21 cents, the cap originally proposed was 12 cents.
Trish Wexler, a spokeswoman for the EPC, said that congressional “meddling” is to blame for the imbalance.
“Whenever Congress meddles in an industry debate over who pays what, consumers never win,” Wexler said. “One side gets a leg up and keeps their windfall, while consumers end up footing the bill. No one is surprised to see that gas retailers are keeping billions of dollars for themselves, while their customers continue to be punished at the pump. Americans should go to their gas stations and demand what’s theirs—a discount for debit.”
In addition to providing an outlet for consumers to petition their congressmen, the Where’s My Debit Discount? site also allows consumers to enter gas receipt information to determine what kind of debit discount should have been applied to their transaction.