Dollar Tree and Kroger slammed for ‘exploiting’ shoppers with sneaky service fee that doesn’t exist at Walmart

SHOPPERS are livid after discovering that Dollar Tree, Dollar General, and Kroger are charging whopping fees for cash-back purchases.

A probe found the three retailers pocketed over $90 million in fees annually for a service provided free of charge by Walmart and Target .

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The Consumer Financial Protection Bureau has published an astonishing new report revealing that shoppers are paying tens of millions of dollars in fees to access their own money.

Kroger , Dollar Tree, and Dollar General are slugging consumers between 75 cents and $1 – or more – to withdraw amounts ranging up to $100, it said.

Dollar Tree defended the practice, saying it was up-front with shoppers about its fees.

But CFPB accused the trio of “exploiting” customers – particularly those living in rural or low-income areas, and communities of color.

“Getting cash at a store is sometimes the only option for people,” it said on August 27.

For example, those living in “banking deserts and in areas where banks and ATM operators charge significant fees,” the CFPB said.

In such circumstances, some shoppers get “cash back” at a store when making a purchase with a debit or prepaid card.

However, the bureau said that it discovered several major retailers charging a fee for this transaction.

This is happening despite the low cost to retailers for processing cash-back debit card transactions ranging from just a penny to about 20 cents.

“The CFPB found that three companies charge cash-back fees and estimates that they collect over $90 million in fees annually for people to access their cash,” the report said.

It singled out Dollar General and Dollar Tree/Family Dollar for slugging customers the highest fees for the service.

They charge a $1 fee – or more – for cash-back amounts under $50.

“Kroger, the country’s largest grocery chain, recently announced new charges at their Harris Teeter stores,” it added.

Kroger’s customers are being charged 75 cents for $100 cash back or less.

The retailer also charges 50 cents for up to $100 cash back at their other brand stores such as Ralph’s, Fred Meyer, and others, the bureau found.

“Three retail companies – Dollar General, Dollar Tree, and Kroger, which also operate brands such as Family Dollar, Harris Teeter, Ralph’s, and others – charge fees for this service, while other national retail companies do not charge a fee,” its report said.

What fees are being charged to get cash back at Dollar Tree, Dollar General, and Kroger?

It’s been estimated that Dollar Tree, Kroger, and Dollar General collect over $90 million in fees annually for people to access their cash.

Here are the fees they charge shoppers to withdraw money:

Dollar General – $1 to $2.50, depending on the amount and other variables

Dollar Tree Inc. (Family Dollar and Dollar Tree) – Family Dollar: $1.50
Dollar Tree: $1

Kroger Co. (incl. Kroger, Ralph’s, Fred Meyer, Pick ‘n Save, and other brands) – Harris Teeter brand: 75 cents for up to $100; $3.00 for over $100. Other brands: 50 cents for up to $100, $3.50 for over $100

Albertsons Brand – No fee

Walmart – No fee

Target – No fee

Walgreens – No fee

CVS – No fee

“The CFPB also estimates that the marginal cost to merchants for processing each transaction may be a few pennies, compared to the much higher fees these retailers charge consumers.

“Levying a fee on small transactions may constitute a hefty percentage of the withdrawal amount, and it may also induce repeat withdrawals, with consumers incurring a new fee each time.”

HEAD TO WALMART

The retailers have been slammed by shoppers on social media.

“For the unbanked portion of our society, getting fleeced again and again,” noted one man on Facebook.

“Go to Walmart, problem solved,” suggested another.

“It’s not right, it’s not fair,” Coretta Steele – who regularly pays a fee to get cash at Dollar Tree and Kroger – told local Fox affiliate WHBQ-TV last week.

The bureau noted that Walmart, Target, CVS, Walgreens, and Albertsons grocery stores offer the same service for free.

“The CFPB observed that many local independent grocers offer the service, but do not charge a fee,” its report added.

“They do not charge a fee, even though they are likely to have thinner profit margins and less bargaining power than national chains to negotiate on pricing on costs they incur from wholesalers or fees for payment processors.”

RETAILERS RESPOND

The U.S. Sun has contacted Dollar Tree, Dollar General, and Kroger for comment on the findings.

“Like many retailers, Dollar Tree and Family Dollar offer cash back as a convenient service for our customers,” said a spokesperson for the Dollar Tree brand.

“Shoppers who want to take advantage of our cash back offering are charged a clearly disclosed fee, which in turn helps offset the variety of costs we incur to offer this helpful service.”

The CFPB also estimates that the marginal cost to merchants for processing each transaction may be a few pennies, compared to the much higher fees these retailers charge consumers.

CFPB

A spokesperson for Dollar General told The U.S. Sun that its outlets were providing a service for those without easy access to banks or credit unions.

“While not a financial institution, Dollar General provides cashback options at our more than 20,000 stores across the country as a service to customers who may not have convenient access to their primary financial institution,” they said.

“These services may also help customers save money on fees compared to alternative, non-retail options such as check cashing locations or ATM fees.”

MYSTERY SHOPPERS

The bureau said that it had sent out mystery shoppers to gauge how much money was being charged for cash-back transactions.

“The CFPB learned that Dollar General’s fees appeared to vary in different locations,” it said.

In a cash-back transaction, shoppers are usually limited to a maximum withdrawal amount ranging from $5 to $50, though some merchants may allow higher amounts.

However, the bureau said that it was vital for consumers to have access to cash, especially during a crisis.

“Some populations are more reliant on cash than others for day-to-day transactions,” it said.

“For example, cash is more frequently used by people with lower incomes, racial minorities, and older Americans than other populations.”