NRF in Washington: Advocacy update October 2022

The midterm elections are right around the corner and will determine the political party that controls the House and Senate. Regardless of which party emerges victorious from the elections, critical policy priorities remain that should be accomplished before the end of the current session of Congress. Here are three issues retailers are watching closely.

Organized retail crime

According to NRF’s 2022 National Retail Security Survey, theft and other retail “shrink” nearly reached $100 billion in 2021. A major component is organized retail crime, the large-scale theft of retail merchandise with the intent to resell the items for financial gain.

ORC has been a dangerous and costly problem for years, but in 2021 retailers witnessed increases in fraud, violence by criminals against workers and customers, and overall security risks for their companies. Consumers are at risk as well due to the theft and re-sale of items that could pose health and other risks when not properly stored.

Although there is no single cure-all for ORC, two bills in Congress would significantly help fight back against these costly and dangerous crimes:

• The Combatting Organized Retail Crime Act (S. 5046/H.R. 9177) would increase coordination between federal, state and local law enforcement agencies by establishing a Center to Combat Organized Retail Crime at the Department of Homeland Security. The bill would also create new tools to assist in federal investigations and prosecutions of organized retail crime, helping recover stolen goods and proceeds.
• The INFORM Consumers Act (S. 936/H.R. 5502) would help curb the sale of stolen goods online by requiring online marketplaces to verify the identity of high-volume third-party sellers. The bill makes it more difficult to fence stolen merchandise online, thereby reducing demand for stolen products.

The passage of these two bills would be a critical step toward curbing the growing threat of organized retail crime.

Credit card swipe fee reform

Credit card swipe fees in the United States are the highest in the industrialized world, averaging more than 2% of the transaction amount — seven times the amount allowed in Europe. Applied to millions of transactions each day, the fees totaled nearly $140 billion in 2021, up 25% from the year before and more than twice the amount 10 years earlier when debit cards are included. They are most retailers’ highest cost after labor — far too much to absorb — and drive up consumer prices for the average American family by an estimated $900 each year.

Swipe fees are so high because of lack of competition. Visa and Mastercard, which control over 80% of the credit card market, centrally set the swipe fees charged by banks that issue cards. They also restrict the processing of credit card transactions to their own networks, prohibiting competition from other networks that offer lower fees and better security. This lack of competition has resulted in high, non-negotiable fees and has stunted innovation and security enhancements.

That is why retailers and merchants of all types and sizes are supporting the Credit Card Competition Act (S. 4674/H.R. 8874). The bill would address the anticompetitive credit card routing market by requiring the nation’s largest banks to allow transactions to be processed over at least two unaffiliated networks — Visa or Mastercard plus either a competing card network or one of several independent networks like Star, NYCE or Shazam.

This reform would finally give retailers a choice in how to route transactions based on what’s best for their business and their customers. Visa and Mastercard would have to compete with other networks on price and service, just like every other American business. Competition over the processing of credit card transactions could save retailers and their customers at least $11 billion a year, according to payments consulting firm CMSPI.

Deferred Action for Childhood Arrivals program

NRF has long supported the DACA program, which provides work authorization and deportation protections for young immigrants who came to the United States as children. These individuals, known as “Dreamers,” grew up here and now contribute not only to the communities they live, but the greater American economy.

On October 6, the 5th U.S. Circuit Court of Appeals declared the DACA program unlawful, thrusting hundreds of thousands of Dreamers and the communities and economy they support into uncertainty. DACA recipients now face the threat of losing their work authorization and deportation protections. Businesses in every industry are also impacted, facing the possibility of losing key employees. All this comes at a time when the nation is facing an unprecedented worker shortage.

The U.S. economy cannot afford to lose Dreamers, who are actively working to build a life in the country they’ve lived in for most of their lives. The time is long overdue for Congress to provide permanent protections for DACA participants.