Dollar General, Dollar Tree and Kroger customers pay over $90 million a year in cash-back fees, federal agency finds

Published On Aug 27, 2024, 3:59 PM

The Consumer Financial Protection Bureau (CFPB) revealed that Dollar General, Dollar Tree, and Kroger collectively charge customers over $90 million annually in cash-back fees. These fees apply when customers request cash back after making purchases with debit or pre-paid cards. Critics argue that these fees disproportionately affect individuals in banking deserts, where access to traditional banking services is limited. While some retailers offer cash-back options for free, the aforementioned companies have instituted fees ranging from $0.50 to $3 for the service. Consumer advocates highlight that these additional costs add unnecessary financial burdens on already vulnerable populations.

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Stock Forecasts

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Negative

Given the potential backlash from consumers and advocacy groups against cash-back fees, along with increasing scrutiny from regulatory bodies, the affected companies may face reputational damage and customer loss. This could put downward pressure on their stock prices in the near term.

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Negative

Kroger's ongoing challenges may exacerbate with negative public sentiment regarding cash-back fees, especially when compared to competitors who offer the service for free. This adversity may lead to lower sales projections and affect Kroger's stock performance.

DLTRView DLTR chart on TradingView

Negative

The negative perception of cash-back fees and the ongoing scrutiny from regulators may also impact Dollar Tree, similar to its competitors, as consumer preferences shift towards retailers that provide more transparent and fair pricing.

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