Harden Communications Partners
Harden Communication Partners
RETAILERS CHARGE FOR BOUNCED CHECKS SURPASSES BANKS/CREDIT UNION NSF FEES
Moebs Study Shows Higher Fees Meant To Increase Revenue and Bottom Line
(Lake Bluff, IL) August 10, 2010 -- National retail merchants have increased what they charge consumers whose checks are returned insufficient funds (NSF) by 20%, according to the latest annual survey by Moebs Services. Merchants are now charging $30 as a median fee in comparison to $25 in 2009. “This is the highest percent increase we have ever seen national retail merchants charge consumers for writing a bad check,” said Michael Moebs, CEO and economist at Moebs $ervices, a national economic research firm based in Lake Bluff, IL. “Retailers fees now surpass those of banks and credit unions median fee of $27 for an NSF.”
Why merchants are increasing fees
The Moebs study lists the two main factors contributing to the 20 percent price increase:
• Merchants, like their customers, are hurting due to the economic recession. The substantial fee increase offsets costs for a more profitable bottom line.
• Merchants don’t want to be bothered with the cost of paper checks and prefer debit cards and e-checks.
Merchant handled bad checks, as opposed to 3rd party approval and technology based solutions, increased in 2010 to 43 percent from 34.3 percent while technology based check approval, such as Telecheck type systems, has decreased from 26.7 percent in 2009 to 13.0 percent in 2010. Offsetting this is the use of e checks where the paper check is swiped. E-checks went from 6.3 percent in 2009 to 12.6 percent. National retail merchants that do not accept checks as a form of tender remained flat at 31.4 percent.
What higher fees mean for consumers.
“Being right in the middle of the back-to-school and vacation season, consumers need to be cautious about how they handle their checking account,” warns Moebs. “The new banking regulations on overdraft fees go into effect this Sunday, August 15. If consumers have forgotten to opt-in to receive over draft projection, many habitually overdrawn consumers will have their checks returned for insufficient funds,” said Moebs.
“With retail business proactively seeking to minimize loss and improve profitability, consumers should verify they have available funds to prevent steep double dip fees and hits to their FICO score,” advised Moebs. ”Whether or not consumers opt-in for over draft protection, everyone should sign up to receive an email or text message alert, when their checking account balance falls below a certain amount.”
About Moebs $ervices Surveys
Since 1983 Moebs $ervices has been collecting primary empirical data. The 2010 Financial Pricing Survey went to 3,495 banks, credit unions, payday lenders, retail merchants, and credit card issuers. The Merchant Fee Pricing Survey, 1 of 5 in a series, went to 659 national retail merchants who do business in 2 or more regions. The final survey was completed August 3rd. The level of precision of this national statistical study is 99%.