Having received a cold shoulder from the U.S. Supreme Court in their quest to lower the cap on debit card swipe fees, retailers are now petitioning the Federal Reserve to reconsider its position on the issue, arguing that the current cap is not what Congress intended when it passed Dodd-Frank.

The Fed is currently reviewing the cap under requirements of the federal Paperwork Reduction Act.

Last week, NRF VP and General Counsel Mallory Duncan sent a letter to the board of governors of the Fed asking them to lower the fee cap from the current limit of 21 cents to something closer to the Fed's original proposed cap of 12 cents.

A press release from the NRF said that the debit swipe fee averages out at about 24 cents after the addition of a per-transaction fee of 0.05 percent for fraud recovery plus one more penny for fraud prevention.

According to the letter:

Prior to the regulation’s adoption, the cost to merchants (and ultimately in part their customers) for an average transaction was 45 cents per transaction. The regulation reduced this figure to 24 cents. Most merchants and consumers have realized the benefits of these savings. One prominent study estimated that approximately two-thirds of the savings is passed on to shopping public and one-third is retained by merchants for investment and return to shareholders. In most cases, 24 cents per transaction represents a significant savings over the prior non-competitive pricing. However, it is still substantially higher than issuers’ incremental costs.

Moreover, Duncan pointed out, the Oct. 1, 2015, shift of more fraud liability to merchants meant that issuers should no longer receive the current 0.05 percent allowed by the Fed.

The battle over what constitutes "reasonable and proportional" debit swipe fees is now in its fifth year. Retailers initially filed suit against the Fed in U.S. District Court in 2011.

A judge ruled in NRF’s favor and ordered the Fed to recalculate the cap, but an appeals court overturned the ruling. In January 2015, the Supreme Court refused to grant NRF’s petition to review the case.

According to the NRF release, retailers have passed along annual savings of $8.5 billion to consumers since the debit swipe fee went into effect, "but there would have been more savings to share if the Fed had set the cap at the level expected by lawmakers."