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In response to news yesterday of 7-Eleven Inc.'s campaign to collect consumer signatures calling for laws to curb card-acceptance fees (CardLine, 7/6), MasterCard issued a statement questioning the benefit to consumers of intervention in existing interchange practices. "Consumers signing 7-Eleven's anti-interchange petition should first ask themselves 'What's in it for me?'" MasterCard says in the statement. "Experience shows that the answer would be higher fees and fewer benefits on their credit cards." MasterCard contends merchants likely would not pass along to consumers any savings from lower card-acceptance costs. "7-Eleven is misleading its customers into thinking that a reduction in the store's cost of acceptance would lead to lower pricing," the statement says. MasterCard points to Australia where, it says, interchange restrictions have led to the implementation of annual credit card fees and a 23% reduction in rewards such as airline miles. "However, there is no evidence that merchants lowered any prices on products or services to reflect their lower acceptance costs," MasterCard says. However, the competitive nature of retailing compels merchants to pass along savings in operating costs to consumers, contends Dennis Lane, chairman of the National Coalition of Associations of 7-Eleven Franchisees and owner of a 7-Eleven franchise in Quincy, Mass. He points to fluctuating milk prices as an example, noting that he sold 1% milk for about $2.99 per gallon a year ago but now sells it for $2.39 per gallon, thanks to lower prices from suppliers. A spokesperson for the Electronic Payments Coalition, which represents card issuers, networks and other payments-industry members, said in an e-mail response that 7-Eleven is misleading customers about the costs and benefits of card-acceptance fees. "7-Eleven and other giant retailers don't want to pay their fair share for a cost of doing business," the spokesperson writes. "In fact, 7-Eleven and its executives have repeatedly and publicly acknowledged the significant benefits that they receive—and that customers receive—when they accept cards for payment."
