Local business owner shares pain of credit card fees

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What’s the most harmful thing at this NE Portland dry-cleaner’s business? Spoiler Alert: It’s not dry cleaning chemicals.

BY MICKIE McCLURE, Owner of Tip Top Cleaners in Portland

I own a dry-cleaning shop in Northeast Portland. It’s a family run business, where I work alongside my husband and daughter. When we bought the place nearly a decade ago, it still used traditional dry cleaning methods that are harmful to our health and the environment. We knew that wasn’t how we wanted to make a living, so we replaced all of the old cleaning components and completely transitioned to a Green Earth system.

Just as the cleaning business has evolved, so has the way people pay for our services. Nearly all of my customers pay with a debit or credit card. Due to the excessive burden imposed by card processing fees, what my customers view as an everyday convenience is actually a major hit to our family’s business.

Just last year, we paid about $8,000 in swipe fees. What does that mean for our bottom line? It means really tough choices. With that amount of money, we could hire another part-time employee. We aren’t able to offer health insurance to our workers – and we don’t have health insurance ourselves.  It’s simply a “luxury” we can’t afford.

We’ve tried to get the fees down to a rate that’s more proportionate to the size and volume of our small business. But frankly, we don’t have the power to negotiate with the big banks for a plan that would save us money.

Many of my customers are surprised when I tell them about these fees. I have to explain to them that yes, even their debit card purchases come with a fee that I am responsible for paying. Banks go around advertising the great mileage or rewards cards they offer, but never tell customers that their local businesses are the ones subsidizing their cards – not the banks. These fees also have very real effects for consumers. I know many businesses that have been forced to raise their prices to compensate for the amount of money they’re losing in swipe fees.

The effect of swipe fees on small business owners from Economic Fairness Oregon on Vimeo.

I’m not alone in this struggle. Small businesses across the country have been bearing the weight of these bank fees for years, and finally lawmakers paid attention. Last year, Congress passed the Durbin amendment as part of the Dodd-Frank consumer protection bill. The new law states that debit card swipe fees must be “reasonable and proportionate” to the true cost, and gives businesses more options and customers more information.

Now, before we even see one penny in savings, the credit card companies are spending millions in an effort to reverse the law. I hope you’ll join me and stand up against the repeal of the Durbin amendment. Our federal lawmakers need to hear from each of us asking them to support the Durbin swipe fee law.

Oregon lawmakers need to hear from us too as they will be debating two measures related to protecting small businesses from excessive swipe fees. To learn more about this issue and how you can get involved go to www.dontswipeourmoney.com.

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