(L-R; Lonnie McQuirter, Doug Nelson, Karen Koehnen, Congressman Stauber & Lance Klatt)
On March 19th, MSSA members Lonnie McQuirter (36Lynn Refuel) and Karen Koehnen and Doug Nelson (Lakeshore Market & More) along with MSSA Executive Director Lance Klatt spent the day on the Hill in our nations capitol lobbying on behalf of MSSA members, our industry and NACS.
One of the coldest NACS’ Day on the Hill in recent years, a little lobbying on the Credit Card Competition Act (CCCA), solving the illicit nicotine problem, and of course, sliding in a discussion or two needing support for year-round E15.
Had many meetings with staffers and an occasional member of congress, even ran into Bernie Sanders of all people in the hallway. NACS’ New President & CEO Frank Gleason and Anna Blom joined us in a few meetings also. Always an experience, and an opportunity to better our industry fueling the future of all MSSA members.
Credit Card Competition Act (CCCA): MSSA has alerted its members to join the fight against high credit card fees in recent months (and years). As all MSSA members know, the use of credit cards comes at a hidden cost to main street businesses and their customers. Every time a payment card is used, fees are charged to the retailer, and those fees have been rising at a dramatic rate for a generation. Because credit card fees are a percentage of the total transaction cost, they multiply with every cent of inflation, driving up the cost of every good and service in America.
The reason these fees are far higher than a free market should bear is because two dominant players – Visa and Mastercard – control about 83% of the credit card volume and price-fix the fees that their card issuing banks charge retailers. Banks should compete on their swipe fee prices, but they all agree not to do that. Sounds like collusion to me?
In 2024, convenience stores paid $21 billion in swipe fees, up more than 80% since 2020 alone. For many in the industry, the swipe fees they pay exceed their pre-tax profits. These fees represent their second-highest operating cost – less than labor but more than rent and utilities. On Visa and Mastercard credit transactions, the average rate paid in the United States was 2.35% of the transaction amount – more than 7 times what merchants pay in Europe.
The Credit Card Competition Act would bring long-overdue competition to the credit card marketplace by creating a choice for the processing of credit card purchases. It would ensure the largest U.S. banks that issue Visa or Mastercard credit cards allow transactions to be processed over at least two unaffiliated card payment networks – the same process that has been used for debit card transactions for more than a decade. CMSPI, a payment consulting firm, estimates that credit card competition would save American consumers and businesses more than $17 billion per year. For our industry, that would mean about $10,000 per year in savings for each convenience store across the nation. Not to mention the savings for our auto repair shops and towing businesses.
Solving the Illicit Nicotine Problem: The market for electronic nicotine delivery systems (ENDS) products, also known as vapes, is in regulatory disarray and the market for nicotine pouch products is moving in the same direction. The U.S. market is being flooded with illicit and unregulated products, largely from China, while the FDA’s approval pathway for legal nicotine products has been arduous and opaque.
To date, FDA has received more than 26 million premarket tobacco product applications for review. Of those products, FDA has only authorized 39 vapor and 26 pouch products to be on the market and FDA will not make clear exactly which products have been denied and what the status is of many products seeking approval. For responsible retailers and wholesalers, the process has created enormous confusion as they do not have the information they need to differentiate between compliant and noncompliant products.
While the FDA’s process is ongoing, the illicit market in the U.S. has seen a dramatic expansion, as companies making and distributing illegal products knowingly violate FDA’s guidance. While FDA has stated it is working to address the problem, it is now estimated that 85% of the market in the United States is illicit products.
The convenience store industry strives to comply with the law. Responsible retailers have seen a complete un-leveling of the playing field as customers are going to other stores to buy illicit products, often from small vape shops. Not only are stores losing sales of legal products but the entire basket of goods that those customers would have purchased. This rampant illicit market not only hurts law-abiding convenience stores, it undermines efforts to keep these products out of the hands of minors and reduces the tax revenues that legitimate retailers collect.
It is time for FDA to provide regulatory clarity by publishing a product-level list of what can and cannot be on the market while clearing the backlog of all outstanding premarket tobacco applications and act on new ones quickly and increase enforcement measures against those manufacturing, distributing and selling illicit products.
Year-Round E15: Each year, more MSSA members are selling E15 taking advantage of blending economics, and grant programs through the State of Minnesota and/or HBIIP program administered through the USDA. Currently retailers throughout the US. Are seeking a one-pound waiver to sell E15 year-round. Currently retailers can only sell E15 from September 16th through May 31st. Due to RVP (Reed Vapor pressure) fuels in Minnesota cannot support the EPA’s Clean-Air Act. Some states have Reformulated fuels allowing e15 to be sold in the summer months. Only thing standing in the way of year-round E15 are small refinery exemptions from the RFS (Renewable Fuel Standard).
