From CNBC: 2024-08-27 15:59:09

Three of the nation’s largest retailers, Dollar General, Dollar Tree, and Kroger, charge fees for cash back transactions, totaling over $90 million annually, according to the Consumer Financial Protection Bureau. Retailers offering free cash back include Albertsons, CVS, Walgreens, Target, and Walmart, impacting rural communities, lower earners, and people of color.

The practice of charging for cash back is relatively new, with Kroger implementing a $0.50 fee for cash back in 2019, which increased in 2024. Retail cash withdrawals are the second most popular method to access cash, accounting for 17% of transactions, behind ATMs at 61%.

Banking deserts, areas without local bank branches, have expanded, affecting over 12 million Americans, according to the Federal Reserve Bank of Philadelphia. Retailers offering cash back provide a crucial service to those in banking deserts, despite facing fees from banks for the service.

Retail advocates argue that banks are to blame for cash-back fees, as merchants must pay fees on cash back transactions. However, consumer advocates believe retailers benefit from offering cash back as it attracts customers, especially in areas without nearby bank branches. Retailers like Dollar General argue that cash back can save customers money compared to other options like check cashing or ATMs.

Read more: Dollar General, Dollar Tree and Kroger charge cash-back fees: CFPB