Some Downeast business owners are struggling with credit card fees that can have a significant impact on profit margins. The fees, which are mandated by state law to be paid by merchants rather than by customers or by the issuers of the credit cards, can reach thousands of dollars of month. It's been enough for Washington County legislators to make preparations to submit a bill to change the law during the upcoming legislative session. Maine is one of only four states, plus Puerto Rico, that requires merchants to pay the charge.
      "Credit card merchant fees are by far my biggest business expense," says Wanda Corey of Dockside Treasures in Lubec. The fees amount to "tens of thousands of dollars per year for my little seasonal gift shop," she adds. "It's frustrating because I could hire another employee with those fees or build an addition to my Lubec business -- or buy health insurance."
      "Small businesses, especially in Maine, are taxed to death," says Heather Henry Tenan, owner of the Eastland Motel in Lubec and C&E Feeds in Calais. "We pay continuous fees, half I don't even know what for anymore. The state of Maine is draining small businesses so they can barely stay afloat." Tenan pays as much as $2,000 per month in credit card fees at the Eastland Motel and approximately half that amount at C&E Feeds.

Credit card fees outlined
      Credit card fees specifically apply to credit cards, not debit cards. They vary from 1.5% to 3.5% per transaction depending on the type of card used, with American Express having the highest fees and Visa having the lowest, according to NerdWallet, a financial advising website. The fees support the technical infrastructure of the credit card payment system.
      Nationally speaking, a movement against credit card fees arose in 2013 when a class-action lawsuit led by business owners argued for the right to allow merchants to apply a surcharge fee to each transaction. The surcharge fee, paid by the customer, would cover the cost of using the credit card. From that point, state after state began permitting surcharge fees, but Maine has yet to do so.
      "If you reach out to any small business owner in Washington County, they will all tell you it is absolutely insane," Tenan says. "We could hire an additional part-time employee at C&E Feeds and two more at the Eastland Motel. I could increase inventory at our general market in Calais. I could even lower prices so our customers could eat healthier for less! At the motel, we could lower our nightly rate and bring in additional tourists so our restaurants are more full, our gift shops are packed and other lodging owners are booked to capacity."
      Ideally, the fees would be paid by the credit card companies, Corey says. "The billionaire credit card companies charge the card holder interest and fees and also charge the merchant - when it's the merchants who do those companies a favor by accepting their cards."
      It feels especially egregious, Tenan says, since the state allows governmental offices at any level to charge the surcharge.
      "Then the state of Maine pours salt into the wounds when they say we cannot recover those fees by adding a surcharge to the consumer's purchase," Corey comments.

Solutions eyed
      With the goal of changing the law in Maine to allow merchant surcharge fees, Tenan has been speaking to local legislators and business owners to rally support for the potential bill. She's had positive responses on multiple fronts, and more than one legislator is on board.
      State Senator Marianne Moore of Calais is one lawmaker who is prepared to submit a bill. "Transaction fees are classified as the 'cost of doing business' [by the state]," Moore says. "However, in this day and age where few people do business in cash, the use of debit or credit cards has increased tremendously. Monthly transaction fees represent a large loss in revenue for a merchant. A solution for a merchant would be to stop accepting credit cards. However, this may result in the loss of a customer."
      "We have so many seasonal businesses whose customers are used to paying with cards. If a business can't recoup those charges, they are either not going to allow people to pay with cards, or they are going to take a hit," says Will Tuell of East Machias, who served in the House of Representatives from 2014 2022 and is running again for election in the House this year. "Neither is good in the long run for the consumer or the business, and both could be holding our economy back. So I support it and am willing to work with anyone else regardless of their party to come up with something that could best serve consumers and our local businesses," Tuell says.
      In the meantime, Moore has identified a workaround that allows merchants to offer a "cash discount," she says, provided that the signs announcing it are carefully worded.
      In practice, Tenan is offering customers at C&E Feeds who pay in cash an instant 3% discount, while those who pay by card will pay the full price -- which has the credit card fees worked in. "We walk a fine line in doing so," Tenan acknowledges. "[It's] a bit convoluted, but still legal and still not fair to the customer -- or the businesses."
      Tenan stresses that she ultimately doesn't want to pass the fee onto the customer, which is why she's lobbying for a legislative change. "The economy is tough right now, and we are all feeling it. I'd like for the credit card companies to do what is right and absorb the cost of rewarding their customers for doing business with them! Will this happen? Probably unlikely, but we just can't sit by and take it. Nothing about this fee is fair."