Paying money to get your own cash: Some big retailers charge for cash-back requests, federal agency finds

Many US retailers offer the option to get cash back when you make a purchase with a bank debit card or prepaid card. But some charge a fee for that convenience.

Many US retailers offer the option to get cash back when you make a purchase with a bank debit card or prepaid card. But some charge a fee for that convenience. It certainly can save you time because you don’t need to make a stop at an ATM. And it may save you from having to pay higher, out-of-network withdrawal fees if you’re not near any of your own bank’s cash machines. Bankrate recently found the average combined cost of out-of-network withdrawal fees — which includes the fee the ATM owner charges you and the fee your own bank may charge — is now a record $4.77. But the fee some stores may charge you when you request cash back can really add up over time if you do it frequently. And consumers who live in areas with few, if any, banking services may not have much choice in the matter, according to a new analysis from the Consumer Financial Protection Bureau. The CFPB surveyed the policies of eight major retailers as a sample pool: two dollar stores (Dollar General and Dollar Tree), two grocers (Kroger and Albertsons), two drugstores (Walgreens and CVS) and two discount stores (Walmart and Target). Of the eight, the CFPB found that three of them — and many of their brand-name subsidiaries — did charge for their cash-back service: Dollar Tree, Dollar General and Kroger. Across these three major retailers, the CFPB estimates customers may pay $90 million a year in cash-back fees. For example, CFPB found that Dollar Tree charges consumers $1 for cash back at its Dollar Tree branded stores, and $1.50 in its Family Dollar stores.