‘Particularly unfair’ merchants have to pay fee on tax portion
by Eric Pereira / staff writer
The Tennessee Grocery and Convenience Store Association had some accomplishments during the state’s recent legislative session, but its leader said the group already has set its sights on next year.
The first priority that President and CEO Rob Ikard mentioned will be to continue pursuing legislation that would promote swipe fee fairness to merchants. A bill addressing the issue could not gain traction in 2021, failing to advance out of committee.
As interchange fees from credit card companies continue to be TGCSA’s area of concern, this will be the association’s third attempt at trying to prohibit companies from charging a swipe fee on the tax collection portion of transactions.
“We think it is particularly unfair that merchants have to pay a fee to MasterCard and Visa on the tax portion, because we’re not making any money off the tax,” Ikard said. “Merchants actually go to great expense to serve the state as its No. 1 tax collector.
“And in addition to those expenses, as credit and debit card use has grown and grown and grown, we have incurred even greater fees on the collection of taxes than we normally would.”
As a part of the upcoming third attempt, Ikard said the association hopes to come back with stronger grassroots support from retail industries.
“There are some 80,000 merchants in Tennessee that are going through this and we have to harness their voices to be in a stronger position when we come in in 2022,” he said.
The association also has built a website, www.swipefeefairness.com, to provide further information on the matter.
Other legislative efforts included working to block the Clean Act, which the association views as an attempt at establishing a statewide bottle deposit tax and statewide plastic bag ban.
“Our problem with this is, as the food industry, we do not want people bringing their garbage back to our sanitary food stores,” said Ikard, who has led the association for seven years.
“A statewide ban on plastic bags could have a detrimental effect on our industry. For example, by leaving us with no other choice but to send customers away with paper bags. Paper bags are extremely expensive. They take up a whole lot of space that we don’t have. And they have an environmental impact that in some ways is worse than plastic bags.”
As is the case in various states across the country, the primary concern for TGCSA’s members is labor.
“All of our members – from the independent retailers to big chains, to the wholesalers – [are] struggling to find people who will come and stay,” Ikard said.
As an example of labor shortage disruption, he cited the fuel market in Nashville, which is “extremely challenged.”
“The big issue there was that the trucking industry doesn’t have people to get the fuel out,” Ikard explained. “Gasoline is being refined and developed and pumped out at a breakneck pace. And yet we can’t get it from the terminal to fuel centers because there just aren’t enough people who drive the trucks.”
On the policy side, the association urged Gov. Bill Lee to curtail unemployment benefits.
“Thankfully, the administration complied with our request and cut those benefits back in July,” Ikard said. “So, believe it or not, we’re in a better in better shape in Tennessee than in a lot of parts of the country, where those full benefits continue to flow and people are getting paid to stay home.”
Although the grocery industry will face some hurdles for the foreseeable future, Ikard was proud to comment on those making a mark in their communities.
One grocer he noted is Naifeh’s Cash Saver in Covington, which took over an old Kroger building.
“They’ve really raised the bar for that community,” he said. “I really point to this store as a beginning of an independent renaissance in Tennessee. And to put our independent grocers at the same level that some of these well-financed big chains.”
Upcoming events for the TGCSA include its golf classic tournaments on Sept.15 and Oct. 13.
