Giving “Credit” Where Credit is Due: To Consumers and Small Businesses

By David Perry

In an era marked by uncertainty and economic challenges, it is imperative that our lawmakers make informed decisions that prioritize the well-being of American citizens and the growth of our economy.

The proposed “Big Box Bill,” aiming to introduce credit card routing mandates akin to those enacted in 2011, raises substantial concerns about its potential repercussions – especially for small business owners, like me and many colleagues, who travel for work.

While the bill may appear to target fairness and competition, a closer examination reveals that it could inadvertently favor large, big box retailers at the expense of customers and the credit card benefits they cherish.

One of the most glaring issues with the “Big Box Bill” lies in its potential to strip consumers of valuable rewards, such as airline miles. These miles have become more than just a perk; they have become essential to many individuals’ financial strategies – including mine. For frequent travelers, especially business travelers like me, airline miles represent hard-earned rewards that enable them to explore new destinations, reconnect with loved ones, and create lasting memories without straining their budgets.

The mandates in the bill will likely mean the end of most reward programs and unjustly take away rewards that have become an integral part of countless individuals’ lives.

The connection between credit card rewards, particularly airline miles, and various industries cannot be understated. Airline miles incentivize consumers to travel, bolstering the tourism sector and giving rise to countless business opportunities. By eradicating these rewards, the bill inadvertently undermines the growth of these sectors and economic recovery efforts.

This could prove particularly devastating given the recent challenges the travel industry has faced here in California, which is still struggling to recover fully from COVID – especially hard hit San Francisco.

Recognizing the potential unintended consequences of implementing such mandates is also essential. While the bill purports to level the playing field for small businesses, it carries the long-term risk of further concentrating power in a few global conglomerates.

Smaller businesses, which often rely on inflated customer spending thanks to credit card reward programs, might find it challenging to compete long-term with larger companies whose model is more centered on competitive prices and whose added revenue from the mandates will allow them to further invest in delivery convenience (think Amazon same-day drone delivery).

As a result, the diversity and competition the bill seeks to foster could be stifled, inadvertently leading to a more monopolistic environment that limits consumer choice.

In light of these concerns, Congress must act in the best interests of both consumers and the economy. The proposed legislation, while well-intentioned, fails to consider the broader implications of its actions.

Rather than favoring a few large corporations, lawmakers should prioritize the well-being of ordinary citizens and the various sectors of our economy that rely on credit card rewards to thrive.

Congress must reject this bill in favor of measures that genuinely promote fairness, competition, and the well-being of all Americans. By doing so, lawmakers can ensure that credit card benefits remain intact, the economy continues to grow, and the interests of citizens – and small business owners like me and my colleagues — are protected.

David Perry

CEO, David Perry & Associates, Inc

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