The grocers strike back

Every time you swipe or dip your credit card, the merchant has to pay what’s called a swipe fee to the bank that issued the card.

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It’s not just to pay the processing costs. To keep you loyal, Visa, American Express, and others have to offer free stuff such as airline miles and lounge privileges. That free stuff also costs money, so banks have been raising their swipe fees.

This forces merchants to raise their overall retail prices so that ultimately you pay for your free stuff. Except the customers who don’t get the free stuff also pay the higher retail prices.

When some merchants fought back by steering shoppers to the cheaper cards, American Express fought them all the way to the Supreme Court, which finally ruled last month that if merchants don’t like the swipe fee, they would just have to stop accepting that card altogether.

And so guess what an affiliate of Kroger called Foods Co. just did? They said they will stop accepting Visa at about a dozen stores.

The grocer will just lower prices instead. You know what this means, right? Somebody who was hoping to enjoy a free single malt scotch between flights might have to settle for a Sprite. All because some of us wanted cheaper groceries.

How will we live with ourselves?

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