This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.

Ron Walsh asks: 

With the trend of retail locations charging a credit card use fee, how is it that grocery stores don't? 

The convenience of swiping your credit card at the register comes at a cost. 

If a business wants to allow credit cards, they have to pay credit card companies a processing fee, which they may end up passing along to you.

The average credit card processing fee ranges between 1.5% to 3.5%, according to the personal finance company Bankrate. 

But while you may have been hit with these fees at your local gas station or your favorite neighborhood restaurant, you typically don't see them on your grocery store receipt. 

That’s because grocery stores have lower processing fees compared to other businesses, they want to maintain their customer base, and they want to remain competitive, experts told Marketplace. 

The cost of swipe fees 

Card fees are a major expense, with some establishments having to pay thousands each month. 

Companies have contracts with credit card companies that determine swipe fees, with larger companies having more leverage to negotiate better deals, said Hailong Cui, an assistant professor of supply chain and operations at the University of Minnesota. 

Swipe fees also vary depending on the type of establishment that you’re running. 

Grocers in general have lower fees than retailers, and may only have to pay a 1%-2% fee while restaurants might have to pay 3%-4%, said Lulu Wang, an assistant professor of finance at Northwestern University. 

As a result, grocery stores may find it more convenient to raise their prices by a little bit than to add a separate surcharge, Wang said.

Grocery stores were one of the last industries to accept credit cards, which means they were able to negotiate a smaller fee, said Indraneel Chakraborty, a finance professor at the University of Miami. 

Save costs or drive away business?

Surcharges are very unpopular among consumers. In Australia, surcharges were implemented two decades ago, and about a quarter of customers still say they would switch stores rather than paying that fee, Wang said.  

Grocery stores may have more repeat customers compared to restaurants, which means they may not be able to get away with credit card surcharges, Wang said. 

There’s a lot of competition among grocers, and those who charge a processing fee will likely lose business, Chakraborty said. 

But even though customers don’t like surcharges, some businesses may still feel the need to pass it along as inflation bites into their bottom line.

U.S. companies had to pay more than $187 billion in credit and card fees in 2024, an increase from $172 billion the previous year, according to the Merchant Payments Coalition, a group that advocates for lower credit card fees. 

Two companies – Visa and Mastercard — control 80% of the market. Their dominance means they don’t have much incentive to offer competitive rates, Erika Polmar, executive director and a cofounder of the Independent Restaurant Coalition, told Marketplace earlier this year. 

It’s “kind of ironic” that big retailers like Walmart have lower fees, while smaller, local stores have to pay more, Cui said.