Three major retailers have found another way to make money off of shoppers: by charging them for something that has always been a free perk.
Dollar General, Dollar Tree and Kroger are charging customers between 50 cents and $3.50 to get cash back when they make a purchase, a study has revealed.
Competitors like Walmart, Albertsons and Target still offer it for free.
Refund collection “takes advantage of shoppers,” especially those who rely on dollar stores. A Reddit user posted a reaction to the news..
‘Many of their clients don’t have a car or money for gas to go to a bank ATM and avoid these charges.’
Popular dollar stores and a major national supermarket chain are charging customers to get cash back when they make a purchase, a landmark study found
Across the three chains, customers pay $90 million a year in cash-back fees, according to the Consumer Financial Protection Bureau.
The CFPB found that Americans with lower incomes or fewer local banking options are more likely to have to pay these fees.
Dollar stores in particular tend to be located in small, rural towns often with fewer branches where residents can withdraw cash for free, the watchdog warned.
Consumers can earn cash back when they make a purchase at certain stores using a debit or prepaid card at the register.
Buyers typically have to choose from preset withdrawal amount options that are presented at the payment terminal at the time they make a transaction.
The CFPB found that Dollar Tree, which has 16,278 stores across the United States, charges $1 for cash back at its Dollar Tree-branded stores.
Meanwhile, Family Dollar charges $1.50 in its stores.
Dollar General, which has more than 20,000 branches, charges between $1 and $2.50 depending on how much cash a customer wants and other variables.
Kroger charges different fees depending on the amount of the pickup at many of its brands, including Kroger, Ralph’s and Pick ‘n Save.
According to the CFPB, brands make consumers pay $0.50 for $100 or less in cash, and $3.50 for larger amounts up to $300.
The company also began charging shoppers for cash back this year at another of its brands, Harris Teeter, where it charges $0.75 for amounts of $100 or less and $3 for up to $200 in cash.
The watchdog estimates that the costs paid by retailers to manage the cashback transaction are likely to be much lower than the fees customers have to pay. CNN reported.
“The geographic distribution of dollar store chains and their primary consumer base raise concerns that these charges may be borne by economically vulnerable populations and those with limited banking access,” the agency said.
‘Dollar stores are prevalent in rural communities, low-income communities, and communities of color — the same communities that may also face challenges accessing banking services.’
While Americans can generally withdraw cash for free at an ATM owned by their own bank, local branches are closing across the United States.
The CFPB found that Dollar Tree, which has 16,278 stores across the United States, charges $1 for cash back at its Dollar Tree-branded stores.
Dollar General stores charge between $1 and $2.50 depending on the amount of cash the customer wants and other variables, with a maximum of $40 per transaction.
Kroger charges different fees depending on the pickup amount at many of its brands, including Kroger, Ralph’s and Pick ‘n Save.
Retailers also set low limits on the amount of cash people can retrieve at a time, so they may have to pay the fees more than once to get the money they need.
For example, if there is a $1 fee to retrieve $50, as is the case at Dollar Tree, you will pay $2 to withdraw $100, in addition to the cost of what you are purchasing to gain access to the cash back service.
“Among the sampled merchants, Dollar General and Dollar Tree charged the highest fees for withdrawal amounts under $50,” the CFPB added.
‘These fees combined with the limited withdrawal amount may mean that the fee takes up a significant percentage relative to the amount of cash withdrawn, and people may be less able to limit the impact of the fee by withdrawing more cash.’