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A couple of weeks ago, I attended the annual NACUBO Conference in San Francisco.  Besides the normal vendor amenities, such as cybercafés and giveaways, I noticed a good deal of vendor hype around refund-to-debit-card disbursements at no cost to campuses. Let's stop and think about this for a minute. After all, the old saying goes "there's always free cheese in a mousetrap." Assuming vendors are not doing something for nothing, how do they make money on debit card refund services? Let me count the ways…

• Debit card interchange fees
• Nonsufficient Funds charges
• Card replacement fees

• Add-on product sales
• Dormant account charges
• ATM charges

Clearly there are many business benefits available to vendors offering you "free" refund services. Some of these vendors' profits come from fees that merchants pay and some are from fees that cardholders pay. Some fees are very visible and some are buried in the fine print. Ultimately, it's your responsibility to "peel back the layers of the onion" and understand who's paying the bill.

However, refund-to-debit-card mania may soon be entering a new phase. As I mentioned in my last blog e-mail, recent legislation now limits some debit card account fees and tasks the Federal Reserve with regulating debit card interchange rates. There is little question that debit card fees are going down and this may force vendors to rethink their business models. What this means to the future of "free" cheese, only time will tell.

Thanks for reading.

PS: In my next e-mail, Refund Mania - Part 2, I'll share some observations I heard at NACUBO surrounding the disbursement of student financial aid refunds.