Blog June 6th 2022

Fee Changes, Inflation, and Ecommerce: How Can Grocers Fight Increasing Costs?

The recent Senate Judiciary Hearing on card fees and competition shined a light on the challenges grocers face with their costs.

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Martha Southall

Senior Manager, Global Advocacy Manager

On May 4th, Giant Eagle CEO Laura Shapira Karet told the Senate Judiciary Committee, “On April 22nd of this year, with no negotiation or threat of competition constraining them, Visa and Mastercard imposed a fee increase that will cost Giant Eagle $1.3 million annually.”

Her story was far too familiar for America’s grocers. Karet was speaking as a witness representative at the first Senate hearing in over 15 years on the topic of excessive swipe fees and competition within the debit and credit card markets.

Karet’s quote represents a challenge that all merchants face surrounding increasing costs of payments acceptance. Giant Eagle’s experience with these recent April fee changes is also not unique – hundreds of grocery chains around the country, both large and small, are also feeling the heat. In a time where inflation is at a 40-year high [1], and commerce continues to move online, payments costs could affect consumer prices and leave grocers searching for mitigation strategies. The question is: How can grocers mitigate cost increases?

Take charge with your debit routing

Optimizing your debit arrangements is one of the most powerful tools merchants have in reducing their costs. But this endeavor is more difficult than ever; new, unregulated debit interchange categories, inflation, and BIN issuance shifts, are just a small sample of the many challenges facing grocers regarding their debit arrangements. Now that transactions are moving online and already represent 9.5% of overall grocery spend [2], grocers must navigate PINless enablement trends and partnerships with third-party delivery services – the maze keeps shifting under your feet! Plus, a clarification from the Federal Reserve that would ensure merchants can route debit transactions online is expected to come soon – widening the scope of debit opportunity available to grocers. Unlike before, debit optimization today now requires attention to not only those PIN transactions in store, but every debit transaction in your profile: Signature, PIN, and PINless debit are all pivotal to your path towards full optimization.

Great – so how do you optimize all your debit transactions? The key to reaching a market leading debit position is through utilizing robust and comprehensive data. Unfortunately for grocers, this is extremely hard to come by, and even if you can get it, there are significant challenges in deciphering all of the line items – not to mention handling the data of millions and millions of transactions. New rates, fees, and interchange categories are only adding to the cocktail of line items grocers need to sift through, making the path out of the debit maze more difficult than ever. Even though deciphering your debit data can seem like reading a foreign language, it’s imperative towards reaching full optimization.

Payments acceptance gets more complicated every day

The job of a payments manager is harder than ever before. With inflation putting pressures on costs – grocers are seeing 7-8% inflation according to the USDA [3] – and fee changes certainly not making anything easier, it’s crucial for grocery merchants to find opportunities to help mitigate the rising costs of their credit and debit cards. While the Senate Judiciary Hearing might seem like a reason for a victory toast, regulation takes a long time to kick in. Most, if not all merchants are knowingly or unknowingly paying too much for the costs of processing card transactions, so you should take control of your costs today to reach a market-leading position tomorrow.


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