Steve Raplee, owner of High Tides Café in Charleston, pays thousands of dollars a year to provide his customers the convenience of paying in plastic.

“That would hire an employee or a couple of part-time people,” said Jim Conran.

Local business owners says processing credit and debit card purchases is a costly business expense and Conran is leading the charge to ensure transaction fees do not get any higher.

Conran heads the organization Consumers for Competitive Choice, which is taking aim at interchange fees —the fees merchants incur for each credit card transaction (typically 1.5 to 3 percent).

The bottom line is transaction fees take a chunk out of a merchant’s bottom line, Conran explained.

The fees are largely set by the card issuers and are divvied between card associations, banks and electronic fund transfer networks.

The advocacy group is gathering petition signatures on its Web site to urge Washington to reform those fees through the Credit Card Accountability, Responsibility and Disclosure Act of 2009 — a measure to stem rising interest rates and deceptive industry practices.

Raplee gets dinged 25 cents each time he swipes a card, in addition to the 3 percent transaction fee.

But what can he do about it? With about 80 percent of customers paying with credit cards, he said he’d lose money if he didn’t accept plastic.

Of course, merchants have the option of shopping around for lower rates. Raplee has. But because he is locked into an agreement with his bank for a year, he’d be charged $300 to switch.

He said a competing bank offered to pay the fee for him if he’d become a customer.

“It’s a pretty aggressive marketing thing they have going,” he said.

Based on the behavior of credit card companies in recent months — upping interest rates and jockeying with fees before the CARD Act closes in on them — the consumer group fears companies may tamper with interchange rates next, which could hurt small businesses, Conran explained.

Nationwide, merchants spent $48 billion in interchange fees last year, according to Consumers for Competitive Change. That’s triple the amount small businesses paid in 2001.

These fees are especially bothersome when a customer returns a product.

Merchants return customers’ money, but never get a refund on credit card fees, said Lia Menten, owner of Waxers Surf & Skate in downtown Coos Bay.

Credit and debit card transactions are costly to convenience stores owners, too. They work with thin profit margins, factoring the fees into the cost of goods or charge extra to customers who pay with plastic. Airport Heights Market owner Tony Crane does both. If someone charges a 99 cent soda to their card at his North Bend store, he’ll add a surcharge.

“If someone buys 10 dollars worth of product, there is enough profit there to absorb it,” he said. “To (use plastic to) buy a candy bar or a 44-ounce soda or a lottery ticket with no profit margin. ... I’d be better off not selling it to you.”

Crane estimates he pays about $200 a month to process plastic. But, he understands card issuers provide a service and they should be compensated for  it.

The Electronic Payments Coalition, which includes credit unions, banks and card payment networks, opposes interchange legislation on the grounds that it would shrink available credit to merchants. The group says the fees are needed to cover write-offs when customers default on their bills. In fact, the average 1.6 percent interchange fee “doesn’t even come close to covering the kinds of losses card issuers face today,” its Web site says. 

Not that any of this is any concern to Danielle Johnson. She runs an “inconvenient convenience store” in Bandon called the Run-In Mini Mart — inconvenient because she doesn’t accept plastic.

“I’m not going to pay extra money for somebody to use a credit card,” she said.