ASSOCIATION NEWS – Venting with pumptoppers


This summer, the nation’s 115,000-plus convenience stores will communicate their outrage over devastating credit card fees via pumptoppers that will educate consumers and Congress about the problem, according to the Old Town-based group, theNational Association of Convenience Stores.
Last week, the group announced that it will make pumptoppers available free of charge to retailers. Pumptoppers typically contain promotional messages about the store but these will communicate the industry’s fight against sky-high interchange rates.

The associationis urging retailers to put these pumptoppers in their promotional signage plans from August 1 to September 6, when Congress is in recess and members will be in their home districts.

Convenience stores sell an estimated 80 percent of the country’s gasoline, and the majority of stores (56 percent) are owned by one-store operators, as opposed to the less than 2 percent that are owned and operated by major oil companies. These stores are increasingly squeezed by low margins and escalating credit card fees; most are losing money when customers pay by credit card.

In 2007, credit card fees cost convenience stores $7.6 billion, more than double the convenience store industry’s profits of $3.4 billion. It has been much worse in 2008 as credit card fees have topped 10 cents per gallon, while the markup on a gallon of gas has averaged only 11 cents for the year so far. After factoring in all operating expenses, retailers lose money on every gallon of gas they sell when a consumer uses a credit card.

Both the House (H.R. 5546) and Senate (S. 3086) have introduced bipartisan legislation, the Credit Card Fair Fee Act, to examine credit card fees, specifically the interchange rate, which is the largest component of the credit card fees that retailers pay every time they accept plastic.

Credit card interchange fees are a fixed fee and a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used. These fees average 1.8 percent in the United States, which has the highest interchange rate of any industrialized country. The U.S. interchange rate is approximately three times the rate in Europe and four times the rate in Australia.

“The credit card fees that retailers pay are outrageous,” said NACS President and CEO Hank Armour, of Alexandria. “Congress needs to see the pain that credit card fees are causing in their home districts,” said Armour. “In Washington, the credit card companies have used their outrageous profits at the pump to fund a massive lobbying effort to prevent fixing the broken system. It is impossible to match their virtually unlimited resources, so we need to take the message straight to where this pain is occurring – at the gas pump,” said Armour.

The pumptoppers that the Old Town-based association has developed have two messages: “Tell Congress you want to know how much this fill-up cost you in credit card fees” and “That pain you are experiencing in part is caused by secret credit card fees.” Both ads encourage motorists to go to the Web site to send a message to their elected leaders. The artwork is available in a variety of sizes and can be downloaded at For retailers who are unable to print the pumptoppers themselves, NACS has arranged a significant discount for retailers who want to order them from signage company GSP at

“The Credit Card Fair Fee Act, a bipartisan effort, would provide an opportunity for merchants to negotiate reasonable terms with the credit card companies and their member banks,” said Armour. “Right now there is no market for interchange fees. The fees are fixed by the banks, hidden from the public and forced on merchants in a take-it-or-leave-it offer. The Credit Card Fair Fee Act would create a market for interchange fees by allowing merchants and the card associations to negotiate on equal footing.”

“It is essential that Congress takes action on this legislation. Without Congressional action, they will increasingly see second- and third-generation family businesses in their districts that will have to close their doors as their livelihood gets siphoned off by the credit card companies,” stressed Armour.

Founded in 1961, the National Association of Convenience Stores is the international association for convenience and petroleum retailing, representing about 2,200 retail and 1,800 supplier member companies. The U.S. convenience store industry, with over 146,000 stores across the country, posted $577 billion in total sales in 2007, with $408 billion in motor fuels sales.