A Look at the Credit Card Swipe Fee Reform: What Will be the Impact?



What Do Swipe Fee Reforms Mean for the Convenience Store Owner?


What will be the lasting impression left by the swipe fee reforms on credit & debit card transactions? The answer remains to be seen. Rest assured, however, that there will be many more twists & turns throughout this reform process. For those not familiar with the situation, let’s take a step back to look at it from the vantage point of a typical convenience store purchase with a payment card. When a customer pulls out their card and swipes it through the machine to make peyment, the operator is charged an interchange (or swipe) fee that typically ranges from 1 – 3% but can scale as high as 5% for some merchants. This comes out to an average of 44 cents per card transaction, and in 2008 operators nationwide spent just under $48 billion in interchange fees.

Following early reform proceedings, many industry experts anticipated a substantial reduction in costs shouldered by the retailers. But there has been push-back & pressure from major bank lobbyists, and changes to the initial reform bill have already been made. When the bill was first laid out, the proposed ceiling on interchange fees was 12 cents. This past June, however, after intense lobbying on behalf of the big banks, the maximum interchange fee was set at 21 cents. This modification goes into effect on October 1st, 2011.
As this article on NACS Online summarizes, there is still a lot to learn regarding the benefits and pitfalls of the swipe fee reforms. Allen Brothers echoes the considerations from NACS in encouraging retailers to take caution in regards to pricing until the full impact of the swipe fee reform becomes more comprehendible. Feel free to contact Allen Brothers if you’d like more information on the swipe fee reform movement, and as always, happy selling!

Norton's Notes - A Merchandiser's Perspective (Part 4)

Today’s posting is the fourth of a multi-part series on a feature that we have incorporated into our blog on a regular basis called Norton’s Notes. We will be periodically adding insight from our distinguished merchandising specialist, Jim Norton. The format of the articles will be in question and answer, and we encourage you all to keep the questions coming to our inbox at the Allen Brothers Inbox.



BEFORE: A Look at a Retailer Rack Prior to Receiving the Allen Brothers Advantage. Take notice of the uneven spacing and inconsistency of product placement.




AFTER: A Look at a Retailer Rack Following the Allen Brothers Advantage Upgrade. A much more unified display designed to enhance the aesthetics and maximize the amount of products.

Question 1.) When you're setting a store, is there a place that you start every time? Maybe in the grocery aisle or candy?

Answer 1.) I usually start in the candy aisle, which is what I would recommend for someone looking to do a little merchandising of their own. It is the easiest section to setup or reset in the least amount of time. It's also arguably the most essential area in a convenience store, so why not be your sharpest, right? The hanging snack and candy sections take more time as you try to set the proper spacing. I end with the grocery, pet and HBC sections, but each person has their own preferences and a lot depends on how you envision the store.

Question 2.) What's the proper amount of spacing that you recommend in an aisle? Is there an industry minimum size requirement?
Answer 2.) No big surprise here, but your customers need to be able to move around the store easily. As a convenience store or grocery market operator, it's a delicate balance between trying to fit the maximum amount of product while not overwhelming your customer's personal space. There are times when, as a store owner or operator, you need to look at the inventory you're carrying and determine if it fits what your customer is shopping you for. Here's a quick example of a spacing problem and a creative solution. Supermarkets used to feature a lot of aisle displays, transforming their customer's walk through the snack lane into a mini obstacle course. This made it not only difficult to navigate, but also burdensome and overwhelming. Now more use is made of end-caps and front end displays, making a huge difference in customer satisfaction.

Continue to check in regularly for continuous convenience coverage from Allen Brothers Wholesale Distribution.  Happy selling!

Cigarette Labels Going Gory

Graphic Cigarette Labels that will appear on Cigarette Packs in September 2012

The Food and Drug Administration (FDA) has chosen the final nine health warnings which will appear on every cigarette pack and advertisement by September 2012. Allen Brothers encourages you to view the full story published in last week's New York Times.

As you can imagine, reactions have been mixed. There are some significant questions regarding the constitutionality of the Tobacco Control Act, especially in regard to the tobacco companies’ constitutional rights to free speech . So far, however, cigarette manufacturers are reserving comment. Allen Brothers will keep you updated of any updates on this story.