PIN Transactions Are Cheapest for the Retailer

Often when I am in a store and use my debit card, the cashier will ask, "debit or credit?" since the card can go both ways. Sometimes, it doesn't matter to me, and I will say, "I don't care, which ever is easier (i.e., less expensive) for you." But not once has anyone ever actually said which is easier for them. Now I know.

According to an article on CreditCards.com ("Merchants Encourage Use of PINs for Debit Card Payments"), a typical supermarket pays $.24 in fees when a shopper spends $40 with their debit card using their PIN, vs. $.35 when they apply their signature. For payment with a regular credit card, the fee would be more than $.50.

Thanks, CreditCards.com, for clearing that up! I'm using my PIN from now on.

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