Does it make a difference if I use my credit card or debit card to pay at the checkout counter? This is a question many have asked and the simplified answer is yes, the least costly method of payment for Wheatsfield is always cash and then check; however if you choose to use a debit or credit card to pay for the transaction, which one to use depends on the transaction amount. The world of interchange fees is very complicated and confusing for most of us to understand. A basic understanding of the difference between the two types of transactions is that credit card transaction has a fixed fee plus a cost based on the transaction amount while a debit card is a fixed fee.

Credit card transactions are processed by a third party vendor and the fees they charge will vary depending on the vendor we contract with to process our transactions. We contract with a preferred vendor through National Cooperative Grocer Association and that organization negotiates the lowest fees for all members. The fees will vary from 1% to 2.95% of the transaction amount plus a flat fee of $.05 to $.26 per transaction. These fees fluctuate depending on what type of credit card is used. As an example Master Card may charge 2.95% of the transaction plus a flat fee of $.10 while American Express may be 2.25% of the transaction plus a flat fee of $.06 per transaction. This gets even more complex because the fee, charged by each issuer also will depend on whether the card used is a rewards card or another promotional type card.

While debit cards look like credit cards, the transaction is handled more like an electronic check rather than an actual credit charge. Debit card transactions are processed though your bank and the fees associated with each transaction are a flat fee which will range between $.25 and .385 per transaction depending on the bank involved and the issuer the bank chooses.

How does your choice at checkout affect your Co-op? From July 1, 2018 to June 30, 2019, Wheatsfield has incurred $100,969.24 in interchange fees associated with the use of credit and debit cards. While these fees are a cost of doing business, as a member you may want to know how you can help keep these fees to a minimum. As a general rule of thumb, if you have a transaction of $5.00 or less and you want to use your credit or debit card to pay for the transaction, using a credit card at the checkout counter would minimize the fees charged to the Co-op. If the transaction is over $5.00, the use of a debit card for payment would generate the lowest fees.

Interchange fees are like most things in the world and are subject to change. Legislation was passed recently to address the amount of fees being charged; however there is disagreement on how to implement the change as well as concern as to the effects the change will have on the economy. While you can’t control what will happen in the future, you can use the above information as a guide to make decisions on using credit or debit cards at Wheatsfield to minimize the impact of the fees associated with their use.