08/27/2024 | Press release | Distributed by Public on 08/27/2024 07:04
WASHINGTON, D.C. - Today, the Consumer Financial Protection Bureau (CFPB) published a new report finding Americans are paying tens of millions of dollars in fees to access their own money when getting "cash back" at large retail stores when making a purchase with a debit or prepaid card. These cash-back fees are occurring against the backdrop of bank mergers, branch closures, and prevalence of out-of-network ATM fees that have reduced the supply of free cash access points for consumers.
"While retail chains had long provided cash back on debit card purchases for free, the CFPB has found that dollar store chains and other retailers are now charging fees for access to cash," said CFPB Director Rohit Chopra. "Many people living in small towns no longer have access to a local bank where they can withdraw money from their account for free. This has created the competitive conditions for retailers to charge fees for cash back."
Getting cash back at a store is a common way for people to get cash. While making a purchase at a retailer that offers the service, people can get access to their money by requesting cash back at the register. Retailers typically have pre-set withdrawal amounts, including maximum withdrawal limits. Consumers benefit from having the cash, and merchants benefit by having a way to attract consumers and reduce their cash-handling costs.
While this was often a convenient offering, getting cash at a store is sometimes the only option for people. Many retailers are filling a void in providing access to cash, as some communities lack access to a local bank. While some retailers have typically offered cash back for free, the CFPB's recent market scan suggests that this is changing, particular at dollar store chains.
The CFPB sampled eight large retail companies (Dollar General, Dollar Tree/Family Dollar, Kroger, Albertsons, Walgreens, CVS, Walmart and Target) and assessed their practices for charging cash-back fees.
The report's findings include:
Read the Director's Notebook statement.
Employees of companies who they believe their company has violated federal consumer financial laws are encouraged to send information about what they know to [email protected].
Consumers can submit complaints about financial products or services by visiting the CFPB's website or by calling (855) 411-CFPB (2372).