My question involves a consumer law issue in the State of: Federal Law and Tennessee Law.
I tried to search this question out but the only results that show up is the wrong type of "cash back" that I'm interested in.
The type of cash back that I'm interested in is using a debit card: Is it illegal to charge a monetary fee to receive cash back at the point of check out at a store that offers cash back when you make a purchase?
Some stores offer that function and some stores don't but I came across a store for the first time that is charging a $1.00 fee to get cash back. It's on the receipt but the party receiving the money is not identified so I asked the cashier and she said, "I don't know, the software updated last week and the fee started appearing."
I contacted my bank and they said: "... we do not assess fees for initiating a cash back on your transactions. The cash back fee in the amount of $1.00
was from the merchant. Please contact the merchant for additional details reagrding this fee. ..."
I have never seen such a cash back fee before as I have engaged this function countless times. I already read somewhere last year that when a person swipes their debit card at the register, regardless of whether the customer receives cash back or not, the bank charges the store around .50 fee for that transaction.
Here's a refresher on that:
Debit cards' $20B issue Merchants, banks' bitter DC battle over swipe-fee cuts.
This fee charged to the retailer doesn't appear on the receipt but is is behind the scenes between the bank and the store but this $1.00 cash back fee is on the receipt and is a separate thing.
Getting cash back does NOT cost the retailer any extra expense that would be above and beyond the card swipe fee because the bank sees the incoming bill for the transaction as a whole that includes the cash back just the same as if the cash back were some item purchased.
The fee the bank charges the store for each debit card swipe is the same regardless if the customer gets cash back or not so why is the store charging $1.00.
Is the retailer providing unregulated financial services?
The $1.00 cash back fee charged by the store is far and beyond the fee that the bank charges the retailer for that debit card transaction.
Is this illegal or is the store just being greedy and opportunistic?
The way this works out, the retailer is charging a fee just like an automated teller machine would. It seems to me that a fee charged by a retailer so that the customer can receive cash back is something that could be and if not should be regulated. $1.00 to receive cash back is outrageous when in fact the store is not charged a fee by the bank for this and does not cost the retailer so much as $00.01 extra. I think it is unfair for it to be illegal for a retailer to charge fees like this on a credit card purchase but can do it to a debit card purchase.
I haven't mentioned the name of the retailer since I didn't want to do that in the first post but if a moderator says OK I'll say which retailer it is. According to their website they have over 6,000 stores in 44 states.
Using their sites site map I looked at every web page they had to offer and can't find even one public notice about this new fee that is charged for cash back.
I find nothing about this in search engines so does anyone know what's going on with this?