Consumer spending for the upcoming Valentine’s Day holiday is expected to reach a record $27.5 billion nationwide this year, according to a recent survey by the National Retail Federation (NRF). However, rapidly rising hidden costs from credit card companies could be a surprise party crasher, cautions the Kentucky Retail Federation.
Industry authority Merchant Payments Coalition (MPC) estimates that “swipe” fees — which banks charge retailers to process credit and debit card transactions — could add more than $600 million to consumers’ receipts this month.
With shoppers projected to spend an average of $188.81, “swipe” fees will account for approximately $4.27 (based on the typical 2.26% rate that Visa and Mastercard charge), about the cost of a standard Valentine’s Day greeting card.
“While we are excited to see a strong Valentine’s Day shopping season forecast, we also recognize that hidden costs like ‘swipe’ fees are harmful to both Kentucky businesses and consumers alike,” said Kentucky Retail Federation president Tod Griffin. “We are working to educate our federal lawmakers about reforms that will provide necessary relief on this front.”
The annual NRF survey found this year’s most popular gift categories to be: candy (56%), flowers (40%), greeting cards (40%), an evening out (35%) and jewelry (22%). Continuing a recent trend, consumers listed online (38%) as their top shopping destination, followed by department stores (34%), discount stores (29%), florists (18%) and specialty stores (18%).
According to MPC, bank card “swipe” fees have risen 50% since the pandemic, reaching a record $172 billion in 2023. These fees represent most retailers’ highest operating cost besides labor, and they are estimated to drive up consumer prices more than $1,100 per year for an average family.
NRF’s survey, conducted Jan. 2-7, polled 8,020 adult consumers nationwide about their Valentine’s Day shopping plans.
The Kentucky Retail Federation is a non-profit trade association representing diverse businesses across the Commonwealth — from department and drug stores to hardware, apparel and building supply retailers.
For more information about the KRF, visit kyretail.com.
Kentucky Retail Federation