The three biggest stores in the country, Dollar General, Dollar Tree, and Kroger, charge their customers cashback fees when they ask for cash back at the checkout counter. According to the Consumer Financial Protection Bureau, these retailers’ fees are more than $90 million annually.
How Does Cashback Fees Work?
Cashback occurs when customers ask the store to give them cash from their debit or prepaid card while buying something. According to a CFPB analysis, charging fees for this cashback service might be taking advantage of certain people, especially people who live in banking deserts, that is, they don’t have banks close to them for easy access to banks or ATMs for free cash withdrawals. The CFPB analysis further reported that the issue mainly affects rural areas, people of color, and those earning less money.
Not all retail stores charge cashback fees back. Stores like Walgreens, CVS, Albertsons, Target, and Walmart offer cashback for free. Stores like Kroger recently started charging for cashback, and the fees depend on how much the customer asks for. For example, in Kroger, customers will be charged 50 cents for cashback of $100 or less and up to $3.50 for more significant amounts.
After ATMs, getting cashback from stores is the second most popular way of withdrawing money. However, the amount people get from stores is usually smaller than what they withdraw from ATMs. In areas that don’t have banks, getting cash from stores might be the best solution, but the fees can be a problem. The fees make it harder for people to access their money without paying extra.
In their defense, retailers blame the banks because they must pay fees whenever someone uses a card to purchase an item. However, some customer advocates question this statement. They argue that stores benefit by offering cashback because it brings customers to their stores. Others feel a fee is another way to make extra money off customers.
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Do They Charge Cashback Fees at Dollar Tree?
Yes, Dollar Tree does cashback and is one of the many retail stores that charge a small fee for this service. The good thing is that they ensure their customers know they have to pay a fee. They also let customers see the amount they will be paying, which varies depending on the amount of cash they want withdrawn from their credit or prepaid cards.
According to the dollar store, the fee helps them cover the costs of offering this service to customers. Dollar Tree charges consumers $1 for cashback at its branded stores and $1.50 in its Family Dollar stores.
How Much Does It Cost to Get Cashback at Dollar General?
Like Dollar Tree, Dollar General offers cashback to customers who use their credit cards to pay for items. The discount store charges a fee, however.
The fee is usually between $1 and $2.50 at Dollar General. The exact amount charged depends on the amount the customer wants to withdraw and other factors.
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Does Kroger Charge Cashback Fees?
Kroger also offers cashback at its checkout counter when customers pay with debit cards. However, it is a bit different from Dollar Tree and Dollar General. The retail store has two different fee tiers for many of its brands. The fee is based on the amount that a customer wants to withdraw.
According to the CFPB, Kroger charges $0.50 for amounts less than or exactly $100. For larger amounts up to $30, Kroger charges $3.50. One of Kroger’s grocery store chains, Harris Teeter, started charging cashback fees this year. If a customer requests cash back of $100 or less, they will charge a fee of $0.75. If they request more than $100, up to $200, the fee increases to $3.
Is There a Limit to Cashback?
Yes, there is usually a limit on how much cashback a customer can get from stores. However, the exact limit depends on the store and, sometimes, the specific location. For instance, at grocery stores like Kroger or Walmart, customers can get between $100 and $200 in cashback per transaction. At drugstores like CVS and Walgreens, the cashback limit is usually lower, around $40 to $60.
At discount stores like Dollar Tree and Dollar General, the cashback limit is usually around $50. Each store sets its own limit because it needs to manage the amount of cash it has available. A customer who wants more than a store’s cashback limit allows would have to do more than one transaction or use an ATM.
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