Sageworks Takes a Closer Look at Swipe-Fee Practices
Posted on 09.19.12
On September 11, 2012, the National Retail Federation said it would go to court to block a proposed court settlement over credit-card fees. Recent data from Sageworks Inc, a financial information company, shows why some retailers might be more inclined than others to balk at the deal, which the group says doesn’t go far enough to rein in swipe-fee practices. Other groups and companies that also oppose this settlement include The National Grocers Association, The National Association of Convenience Stores, Wal-Mart, and Target.
Sageworks conducted a financial statement analysis of privately held companies across several major retail categories and found that owners of gas stations and grocery stores have some of the slimmest net profit margins in retailing. For every dollar of sales they generate, they earn less in profit, on average, than other types of retailers, such as clothing stores and health and beauty shops. That leaves less padding to absorb so-called swipe fees when they rise, and consumer spending is shaky enough that many retailers are skittish about the alternative: passing the fees along to customers. The outcome of this settlement could be the difference between staying profitable or not.
To learn more, visit the sageworks blog at: