Dollar General, Dollar Tree, and Kroger have charged customers who ask for cash back in recent years. According to a report by the Consumer Financial Protection Bureau (CFPB), these fees have increased to more than $90 million annually. The CFPB analysis showed that charging fees for cash-back services affects rural communities, lower earners, and people of color.
The fees range from $0.50 to over $3 per transaction. Not all retailers charge for cashback services. Albertsons, CVS, Walgreens, Target, and Walmart offer cash back without any extra charge.
However, several Kroger brands, like Fred Meyers and Ralph’s, started charging cash-back fees in 2019. Banking deserts, areas without a local bank branch, are growing. In 2023, more than 12 million people, or 3.8% of the U.S. population, lived in banking deserts.
The rise of digital banking and physical branch closures have worsened the problem. Vulnerable populations, who are less likely to access online and mobile banking, are significantly affected. Retail advocates blame banks, which charge merchants fees whenever customers swipe a debit or credit card, including fees on any cashback provided.
Charging fees for cash-back services
Many retailers absorb these costs, offering cash back as a free service to attract customers and offset some financial loss. Consumer advocates argue that retailers could benefit from free cash-back services to draw more customers, especially in areas lacking bank branches.
However, the debate continues over who bears the ultimate financial burden—merchants or consumers. As banking deserts grow and more consumers rely on alternative financial services, the discussion on cash-back fees will likely continue. Both retailers and consumer advocates agree that more needs to be done to support vulnerable populations who lack easy access to cash.
Dollar Tree charges $1 for cash back at its Dollar Tree stores and $1.50 at Family Dollar stores. Dollar General’s fees range between $1 and $2.50, depending on the amount withdrawn. Kroger’s fees vary, with some brands charging $0.50 for $100 or less and $3.50 for larger amounts up to $300.
Harris Teeter, a Kroger brand, charges $3 for cash withdrawals between $100 and its cap of $200. A spokesperson for Dollar Tree stated, “Dollar Tree and Family Dollar offer cash back as a convenient service for our customers. Shoppers who want to take advantage of our cash-back offering are charged a clearly disclosed fee, which helps offset the variety of costs we incur to offer this helpful service.”
The CFPB is not stating that retailers are prohibited from charging these fees.
However, it highlights the potential financial burden on people with limited access to their own bank’s services. Going forward, the CFPB plans to continue monitoring the fees consumers pay for accessing cash and the broader issue of banking accessibility.
