Sep 28, 2012, 8:00am

October 1 marks the one-year anniversary of the Durbin amendment and a year later, as predicted by economists, academics and analysts, new research shows that retailers continue to hold on to the $8 billion windfall they received from Congress, without passing those savings along to consumers. Despite retailer promises of lower prices, consumers paid on average 1.5 percent more after the implementation of the Durbin amendment, according to the analysis.

In 2010, Congress handed retailers a gift with the Durbin amendment, a new regulation that put government price controls on debit interchange fees – what retailers pay to accept debit cards at the register. During testimony, retailers promised they would pass savings along in the form of lower prices to their customers. On October 1, 2011, the Durbin amendment went into effect, slashing in half what retailers pay for debit acceptance. Consumers, however, have not seen the savings.

“With a wink and a nod, giant retailers promised to lower prices for their customers if Congress passed the Durbin amendment. One year after implementation, retailers have taken home $8 billion while many of their customers pay more at the register,” said Trish Wexler, spokeswoman for the Electronic Payments Coalition. “Let’s just call a spade a spade – this was a political handout to big box retailers, who are now scrambling to make excuses for why they couldn’t pass these savings along to customers.”

To collect the data for the field research, 36 shopping trips were performed at 18 stores nationwide. A consistent list of products was purchased during two separate shopping trips at each store and compared: one in the final week of September 2011 before implementation of the Durbin amendment and one in the final week of September 2012, one year after the implementation of the Durbin amendment. The research shows that 67 percent of the retailers visited across the country either raised prices or kept them the same.

After implementation, shoppers paid on average:

• $2.22 (or 6.6 percent) more for the same items at Home Depot in Atlanta, Georgia. Despite this retailer’s claims to the contrary, our shoppers saw price increases at this chain more than any other.
• $0.80 (or 5.4 percent) more for the same items at Walmart in Portland, Maine.
• $1.00 (or 2.6 percent) more for the same items at 7-Eleven in Washington, DC.
• $0.30 (or 2.9 percent) more for the same items at Walgreens in Boston, Massachusetts.

These higher prices for consumers come as retailers save billions and debit card issuers are forced to make up for lost revenue. Consumers are paying more for traditional banking products and services and not even getting any reduction at the register to help ease the pain.

And just recently, BankRate.com published a Checking Survey which found that the costs of checking have risen dramatically, with some bank fees rising 25 percent or more. The survey finds that the rise in fees is, in part, a result of recent regulations limiting overdraft fees and capping the cost of debit card interchange fees.

To learn more about this field research, the impact of the Durbin amendment and ways consumers can demand their debit discount, visit www.WheresMyDebitDiscount.com.

About the Electronic Payments Coalition

The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC educates policymakers, consumers and the media on the system’s role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.

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