European Commission Rules to End Interchange Fees
In December, the European Commission (EC) ruled that hidden fees charged by MasterCard to process credit-card transactions in Europe inflate costs for consumers in violation of EC rules and must be withdrawn within six months.
Speaking out in support of the ruling, the National Retail Federation’s (NRF) senior VP and general counsel Mallory Duncan stated, “European authorities say MasterCard is double-dipping in Europe, and that’s exactly what we think both MasterCard and Visa are doing here in the United States. Visa and MasterCard are charging billions of dollars directly to consumers for all the fees that show up on their monthly statements, then they turn around and charge billions more from the hidden credit-card fees they force merchants to include in the price of merchandise.”
Both the EC and NRF expressed concern that hidden “interchange” fees drive up costs but deliver no benefit or efficiencies. NRF’s Duncan called on U.S. authorities to respond to the European ruling with similar action that would benefit consumers and retailers in this country.
In a prepared statement, the Food Marketing Institute (FMI) of Arlington, Va., described the ruling as “an early Christmas present for consumers” and noted that European interchange fees range from 0.40% to 1.20% per transaction, which is considerably less than the rate in the United States, which averages 2.14% per transaction.
Additionally, FMI reported that Visa and MasterCard collected more than $36 billion in U.S. interchange fees in 2006, and the total was expected to exceed $40 billion in 2007 and $50 billion this year.
Merchants are prohibited from disclosing the interchange fee on customer receipts, but Visa and MasterCard banks charge merchants the fees every time a credit card or debit card is used for a purchase.
Stage Stores says Peebles evp to retire
HOUSTON Stage Stores today announced that Dennis Abramczyk, evp and coo of its Peebles Division, will be retiring after approximately nine years with the company. He will continue to serve in his position until a replacement is found.
Jim Scarborough, chairman and ceo, commented, “We want to thank Dennis for his contributions and service to our company, and we wish him well as he begins this new phase of his life. We will immediately begin a search for his successor, and we are pleased that Dennis will be staying on until the conclusion of our search process, as this will ensure a smooth and orderly transition.”
Home Depot to cut 500 HQ jobs
ATLANTA Home Depot is cutting 500 jobs at its headquarters. According to reports the cuts make up 10% of the 5,000 employees who work at the headquarters.
The cuts are partly due to the struggling U.S. economy, which has hurt market conditions, reports said. Employees were notified of the eliminations today, they will be paid through April 4.
Home Depot reported fiscal 2007 third quarter consolidated net earnings of $1.1 billion, or 60 cents per diluted share, compared with $1.5 billion, or 73 cents per diluted share, in the same period in fiscal 2006.