Retailers made millions charging you cash back fees, report says

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Transcript:

CONWAY GITTENS: I’m Conway Gittens reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.

Retailers are in focus on Wall Street with the Dow at record highs and the S&P 500 moving towards the same. Foot Locker posted its first same-store sales growth in six quarters thanks to an early boost from back-to-school shopping. Kohl’s, which has struggled for a long time, beat profit forecasts but sales guidance was disappointing.

Sticking with retailers…You know when you swipe your credit or debit card at a retailer’s machine and it asks you if you want cash back? Well, Bankrate has done the math - and the average fee from getting cash back at the register has hit a record high of $4.77. That fee is a combination of the ATM service charge and your bank’s out-of-network convenience fee.

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While that may not seem like much, consider this, the Consumer Financial Protection Bureau surveyed the cash-back policies of 8 major retailers of differing types: Dollar General and Dollar Tree, Kroger and Albertsons, Walgreens and CVS, and Walmart and Target. Just three of those retailers alone: Kroger, Dollar General and Dollar Tree rake in an estimated $90 million in cash-back fees every year. Dollar General charges as much as $2.50 and Kroger’s fee goes as high as $3.50.

While those fees hit all of us in our wallets, the CFPB says it disproportionately hits those who can least afford it - those who typically frequent dollar stores the most.

“The geographic distribution of dollar store chains and their primary consumer base raises concerns that these fees may be borne by economically vulnerable populations and those with limited banking access.”

There are 36,000 Dollar Tree, Family Dollar, and Dollar General branded locations mainly in the U.S.

The CFPB says it will continue to monitor the situation.

That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.