Dollar Tree, Dollar General, and Kroger Have Charged Customers Millions in Hidden Fees

Not everyone lives close to a bank. In a similar way that certain areas of the country are in food deserts — where access to affordable and healthy food options are limited or nonexistent — some areas are also in bank deserts. This means that people don’t live close to a bank branch where they can easily get access to cash without having to pay a fee. As a result, many customers turn to their local retailers and use the cash-back service when checking out to easily get access to cash. While most retailers offer this service for free, others do not — including retailers that we typically already see in these food deserts.

Dollar Tree, Dollar General, and Kroger are charging customers for their cash-back service at checkout, which has amounted to $90 million dollars of accumulated fees in a year, according to the Consumer Financial Protection Bureau. Even though these three stores are listed under the top 20 largest U.S. retailers in terms of sales in 2023, these stores are charging fees between $0.50 to $3.50 for cash back when customers request it at checkout.

Offering a cash-back service does cost the retailer some money; banks charge the retailer a 2% to 4% transaction fee when a card is used at a store, meaning that the retailer will likely have to eat the cost of that cash back requested in the final total of a customer’s purchase. According to a recent CNBC report, retailers typically don’t charge for the cost since the service is valuable to customers, and can even encourage customers to walk through their doors consistently.

But for customers living where banks or grocery stores are limited, paying a fee at the local Dollar Tree or Dollar General is likely their only option in town to get cash — especially when banking deserts are growing after many branches closed during the COVID-19 pandemic and getting access to online and mobile banking might be difficult. So this is definitely something shoppers need to keep in mind the next time they want to get cash back at a store.