24 June 2010

Let Your Checkbook Do the Talking

Danielle Chatfield-Beres is one of my favorite people in credit unions. As an amazing credit union marketer, Filene i3er, Partnership Symposium attendee, and all around awesome person, seemingly everything she's ever been involved in has become better as a result. One of my favorite stories about her was a decision not so long ago to leave her position as a rockstar credit union marketer to take a job at another credit union to become...a controller. She had aspirations to be a CEO someday, and that seemed to be the most logical way to position herself to make that happen. I love that.

Anyway, that's a long introduction to the point of this post. On the CUDE listserv the other day Danielle posted her frustration with the way Dick Durbin's interchange amendment has been discussed publicly by merchants. The basic argument on their side is that interchange (or swipe) fees are simply another case of meaningless profiteering by financial institutions.

Danielle has had enough, and posted what I think is a very clever way to fight back:

"My new protest weapon against interchange:  My own checkbook.  Specifically, my ability to give big box retailers precisely what they are purportedly after...a return to the good old days of the expenses of dealing with cash and checks.

I resolve to dig out my checkbook from under the dust bunnies and walk into a big box retailer, select about $10 worth of items to purchase...and proceed to the checkout counter with only my checkbook in my hand and my driver's license buried deep at the bottom of my purse where I'll have to spend a minute or so searching for it.

I'd love to get 25 or 30 of my closest CU friends to join me.  I'd love to have others across the country do the same.  I'd love it even more if we made it such a concerted event in different locales that we could REALLY get our local media to pay attention and bring a camera to watch how much people adore having their checkout lines clogged up with people paying by check.

I've read the interchange compromise summary.  I've watched the hearings.  I know this particular battle may not be won.  But at least we can make a loud enough point about it that when consumers start seeing their account fees rising, we can give them certain legislators' contact information so they know who to thank for it."

 I love this idea. I hope you do as well, and will join us on this.

(Now if I could only find that checkbook...)


Carla said...

I love Danielle's idea. Could you imagine the impact if people started paying by check at the grocery store every time they went?

How many additional employees would stores need to hire to handle the longer time it takes to process checks versus debit/credit cards? Plus, to handle bad checks?

While I'm not sure enough people could be mobilized to make an impact, I love the idea.

Matt, the Credit Union Warrior said...

Carla - Imagine if banks and credit unions collaborated on turning off all card programs for 6 months. It won't happen (and probably shouldn't), but it would be a powerful demonstration of the value that plastic delivers.

Ron Shevlin said...

I don't understand how this helps a CU or bank. If I can charge you $2 for doing something (use debit card), and the government tells me I can only charge you $1 for doing that, how does it help me to get you to change your behavior to do something I can't charge you anything for (check processing)?

Handling cash and checks is still less expensive to a retailer or merchant than taking a credit or debit card.

What banks/CUs should be doing is not slapping flat fees on checking accounts, but imposing per check charges. Heavily incent consumers to not write checks AT ALL.

If the overall percentage of debit card transactions rises, banks/CUs will make more on interchange fees -- even at the lower rate -- and the dumb@ss merchants that fought for this legislation will end up paying out an ever higher percentage of their overall revenue in card fees.

Danielle said...

(One small point of clarification...my previous post was as director of Community Affairs. Those awesome marketers of the world have far more talent than I can claim)

That being said, I have to tell you...I went to write a check at the gas stations yesterday and they wouldn't take my check!!

I really did need gas yesterday. I wasn't just doing this as a stunt. My car is now running on fumes.

I walked up to the counter with my checkbook at the ready and said, "I want to put $20 on pump 3, please".

The cashier looked at me like I was an alien from outer space. He said, "ummmm...yeah....we don't take checks".

I was flabbergasted. Here I was trying to save them money and they wouldn't take my perfectly good check!

So I asked the obvious question, "You'll take my debit card, but not my check?"

He repeated, "We don't take checks"

So I said thanks, closed my checkbook and started to leave. But the guy behind me in line asked, "so was that check going to bounce?"

I, of course, explained I was just confused. Convenience stores went before CONGRESS and said that they thought Debit and Check processing costs were virtually the same so they should be charged the same...and yet for some mysterrrrious reason, they won't even accept a check.

(Don’t just take my word for it, see p. 4 of Qik-N-Ez President Wendy Chronister’s statement at a Senate hearing on June 16th - http://tinyurl.com/29557sk )

I can't fathom why that would be. I'm going to have to call the posted customer service number for the gas chain and ask them to explain it to me.

Danielle said...

Ron - to respond to what you said:
"Handling cash and checks is still less expensive to a retailer or merchant than taking a credit or debit card."

The point of the checkbook experiment is to demonstrate that's not always true. If handling cash and checks was truly less expensive when ALL the costs are considered (storage, fraud, robbery, etc.) then gas stations and the like would gladly accept checks. Which they don't.

There are definitely some mom-and-pop shops that accept cash and checks and that really is better for their business...and I totally get that.

I'm just saying the big retailers are making claims that they would save so much more money if people didn't use plastic...when in practice that's just not true.

The government accountability office's own Interchange report from 2009 does a fair job of reporting on both sides of the issue. Their basic conclusion is sound: It's a VERY complicated issue with lots of stakeholders and it required an involved evaluation of all the potential consequences. http://tinyurl.com/239gf6t

Unfortunately for the consumer, that's not what they got.

Ron Shevlin said...


Couldn't agree more that the large retailers' claims hold no water.

If you really want to remedy the situation, taking revenge on merchants by writing checks isn't really going to have much of an impact. They're NOT going to increase their staffing levels because of a shift in the payment mix.

And for consumers who are enrolled in debit card rewards programs, why in the world would they want to stop using those cards and write more checks?

If you REALLY want to remedy the situation, here's what I think will have the biggest and most sustainable impact: VOTE REPUBLICAN.