Despite new limits on debit card interchange, the price of Slurpees has stubbornly remained the same, according to a survey completed by the payments industry’s lobbying group.
However, 7-Eleven Inc., which sells Slurpees, might be justified in raising the price of the frozen drink, a PaymentsSource analysis using Visa Inc.’s new interchange rates has found.
The Electronic Payments Coalition released data on Dec. 9 suggesting that some merchants have not lowered their prices since Oct. 1, when federal caps on debit interchange went into effect.
Those findings were unsurprising given their source. The coalition, which represents financial institutions, vehemently opposed the interchange-fee caps that were required by the so-called Durbin amendment to the Dodd-Frank law. The lobbying group still argues that the amendment is “harmful” to consumers.
Retailers backed the swipe-fee cap, and some said the interchange regulation would result in lower prices for consumers. But the coalition said its research has not found evidence of that.
The payments group says that 16 out of the 21 retailers it visited this fall either raised prices or had kept them the same since Oct. 1, and that on average customers paid 1.7% more for goods in that time.
The coalition collected the data during 84 shopping trips at 21 stores across the country. Its representatives bought the same items during four different trips to each store, before and after the Oct. 1 fee-cap implementation date.
The group highlighted its findings at 7-Eleven and other vocal supporters of interchange-fee regulation. The price of Slurpees remained a consistent $1.49 from September to November, according to the coalition.
One industry observer has noted that the new debit rates actually could raise costs for small-ticket purchases (
For supermarkets, Visa has set its check card interchange rate at 21 cents plus 0.5% of the sale for nonexempt issuers. As such, the interchange on a $1.49 purchase would be 21.7 cents, but issuers also could add on a few cents for meeting certain requirements under the Fed’s new rule. Visa’s exempt supermarket rate, which applies to issuers with less than $10 billion in assets and is the same as the rate used for most issuers before Oct. 1, is 0.95% plus 20 cents. Under that scenario, the interchange fee for the same $1.49 purchase is 20.7 cents.
As such, 7-Eleven might be justified in raising its Slurpee price.
The coalition also found that prices for items at a Wal-Mart in Boston increased by $1.07, or 3%, during that period, and that prices at a Walgreens in Little Rock, Ark., rose 73 cents, or 2.9%.
Jeffrey Green and Will Hernandez contributed to this story.
