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Wal-Mart, McDonalds say Durbin Amendment costing them money

The world’s largest retailer and restaurant chain are both expressing doubt that the Durbin Amendment saves them any money at all.

Treasurers from Wal-Mart Stores Inc. and McDonald’s Corp. spoke at a financial industry conference on Friday, indicating that the cap on interchange fees was not low enough to have an impact on their savings, according to Reuters.com. The treasurers also said the rule may ultimately cost them more.

McDonalds and Wal-Mart both depend on a high volume of inexpensive purchases such as coffee, soda and candy. The Durbin Amendment caused debit card issuers to raise the interchange fee on smaller-ticket transactions, making it more expensive for merchants to process the transactions than before.

Redbox, the privately held DVD company, has already reacted to the higher fee on smaller transactions by raising prices on DVD rentals at its movie kiosks from $1 to $1.20, according to Reuters.com.

Another retailer that has expressed skepticism that it will see any substantial savings from the Durbin Amendment is 7-Eleven.

Richard Peck, the company’s senior director for corporate finance, said that 7-Eleven’s gas stations and convenience stores will see a mixed impact from the rule.

According to Peck, gasoline purchases will be cheaper to process on debit cards while purchases made in the stores with debit cards will likely be more expensive.

“It’s unclear, overall, whether we will benefit,” Peck said, according to Reuters.com.

One Response to Wal-Mart, McDonalds say Durbin Amendment costing them money

  1. Small business with small ticket averages have been negatively affected by Durbin. With the first month of Durbin, October 2011, we saw an increase of nearly $300.00 in credit card transaction cost. We are a small business with small profits and are now taking a 3,600 cut into that profit and why.
    My question is why this was not considered when the amendment went into effect?