Retailers Are Losing Money on Returned Items

What's Hot

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

Do This or Your iPhone Bill May SkyrocketSave

11 Places in the World Where You Can Afford to Retire in StyleMore

19 Moves That Will Help You Retire Early and in StyleFamily

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

50 Ways to Make a Fast $50 (or Lots More)Grow

32 of the Highest-Paid American SpeakersMake

The 35 Two-Year Colleges That Produce the Highest EarnersCollege

5 DIY Ways to Make Your Car Smell GreatCars

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

7 Household Hacks That Save You CashAround The House

5 Reasons a Roth IRA Should Be Part of Your Retirement PlanGrow

30 Awesome Things to Do in RetirementCollege

Beware These 10 Retail Sales Tricks That Get You to Spend MoreMore

9 Tips to Ensure You’ll Have Enough to RetireFamily

If you think returning an item is a pain, pity the merchants who not only take it back but might pay extra if you used your debit card.

The following post comes from partner site

Debit card interchange fees will decrease on Oct. 1 – good news for merchants who have long complained that the interchange fee, also known as a swipe fee, was too high and cut into their profits.

The new regulations are helpful, but the interchange fee will continue to be a complicated and costly issue between retailers, banks, and credit card processors.

Consumers give little thought to the interchange fee that’s charged every time they swipe their debit or credit card, but the fee can take a large bite out of a retailer’s profit. Currently, the interchange fee on debit cards averages 44 cents per transaction. But the reduced fee will be 21 cents, plus an additional amount to cover losses from fraud.

This will save retailers a lot of money, but the new ruling didn’t address what happens to the interchange fee if the purchase is returned. Even though the merchant refunds the full purchase price to the consumer when an item is returned, the retailer may take a loss on the transaction – because credit card processing charges aren’t refunded to the retailer when a transaction is reversed. Some processors may even charge a second interchange fee when an item is returned.

“While holding onto this fee sounds like one more way banks and credit card processors are squeezing money from customers and retailers, it’s difficult for the system to run in reverse,” says Bill Hardekopf, CEO of “It would be hard to create a system that accurately and quickly refunds credit card processing fees.”

The easiest way for merchants to recover this fee is to charge customers a return or restocking fee.  But many merchants are reluctant to do that because it could anger their customers.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 5 Expenses That Vanish During Retirement

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,642 more deals!