Skip to main content

Professor Semeraro’s Op-Ed: “How Reward Cards Encourage Merchants to Lower Prices” in Fortune Magazine

July 18, 2018

The following commentary by Thomas Jefferson School of Law Professor Steven Semeraro appeared in the July 16, 2018 edition of Fortune:

To the extent that reward cards increase a merchant’s revenue through increased sales, the merchant can spread its fixed costs more widely and thus increase its profits. In a competitive market, merchants would have an incentive to reduce prices, trying to capture still more sales.

To the extent that the additional sales generated by reward cards lead merchants to lower their prices, those using reward cards, in a sense, subsidize those who use other means of payment.

The rest of Professor Steven Semeraro’s commentary can be found here.