When the Durbin Amendment seeking to cap the price retailers pay to accept debit cards originally was shot down last June, retailers lost a battle to the banks — but they ended up winning the war. Just months later, the amendment went through, and the debit-swipe fee cap was implemented Oct. 1.
Many merchants had argued that such a cap would allow them to offer lower prices to consumers. One study a few months later — although done by a lobbyist group for the financial industry — showed this was not always the case, pointing fingers at 7-Eleven, which had long protested the fees but didn’t lower prices, and Wal-Mart (NYSE:WMT), whose prices actually went up since the cap was put in place.
The same cannot be said of Home Depot (NYSE:HD).
HD, like 7-Eleven, was one of the most vocal critics of the fees, but instead came through on its word — big-time. America’s largest home-improvement retailer has lowered prices on 3,000 products since the debit-swipe fee caps were put in place.
Dwaine Kimmet, the retailer’s treasurer and vice president of credit, told American Banker the drop in prices cannot be directly attributed to the Durbin Amendment. However, because interchange fees are a huge part of HD’s operating costs, the lowered fee clearly had an impact.
Home Depot is now pushing for the same kind of limits for credit card fees, while also seeking alternatives to the traditional credit card system. For example, it recently began to accept eBay‘s (NASDAQ:EBAY) PayPal service in-store.