A recent report by the Consumer Financial Protection Bureau (CFPB) has highlighted that three large retail conglomerates—Dollar General, Dollar Tree, and Kroger, which operates Family Dollar, Harris Teeter, Ralph’s, and other businesses—have charged consumers over $90 million annually in fees for cash-back from debit or prepaid card purchases. The report emphasized that many of the customers paying these fees belong to "economically vulnerable populations."
The CFPB is the latest regulatory body to scrutinize corporate mega-stores for increasing prices on consumers. The Federal Trade Commission (FTC) recently reported that grocery conglomerates like Kroger exploited supply chain disruptions during the COVID-19 pandemic to boost profits.
The report questioned the claims made by some companies that rising grocery store prices were due to their own increasing costs. FTC Chair Lina Khan stated, "dominant firms used this moment to come out ahead at the expense of their competitors and the communities they serve."
Unlike ATM transactions where costs can be spread over larger withdrawals and are more equally distributed across incomes, cash-back fees charged by retailers—amounting to $90 million annually—are predominantly borne by those most financially at risk. The CFPB noted that these retailers benefit from offering cash-back due to reduced costs associated with handling cash. The report mentioned, "dispensing cash to consumers, such as through cash-back transactions, reduces merchants’ supply of cash and therefore also reduces their cost of handling, transporting, and depositing excess cash."
The statement concluded with a call for investment in new technologies and legislation for national data security standards to create a stronger payment system.