Retailers rake in millions from cash-back fees: CFPB report

Three retail chains, Dollar General (DG), Dollar Tree (DLTR), and Kroger (KR), have raked in millions from customers who request cash back when they use a debit or prepaid card, according to a report from the Consumer Financial Protection Bureau (CFPB).

Wealth host Brad Smith delves into the details of this discovery.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video Transcript

Dollar, General Dollar Tree and Kroger are charging you fees when you get cash back at their stores.

Yes, you heard that, right?

You are paying more when you try to access your own money at these stores.

And that's one, and that's to the tune of tens of millions of dollars here now the Consumer Financial Protection Bureau.

They sampled eight large retail chains and found those three are estimated to charge about $90 million in cash back fees annually.

Now each chain has cash back fees between 50 cents and a dollar.

But the real amount the retailer pays for processing those transactions just a few pennies.

And according to these findings here, dollar stores are typically located in small rural towns, communities of colour and low income communities, and those areas are likely to have fewer banking options.

So fewer places to withdraw cash without a fee.

And that's thanks to things like bank mergers, bank closers for branches and out of network ATM PS.

All that together means these consumers are hit the hardest.

So watch where you're shopping before you pull out your money as well.

On that end,