How does that make any sense? I put my card into the reader and it debited from my bank account. I didn't pull cash from an ATM and there was no ATM present in the business.

In my country, one can perform debit card transaction with 'cash back' - if I'm in the grocery store buying $50 of groceries with my debit card, and I also want $30 of cash, they can charge my card $80 and hand me $30 from the drawer.

This was a great boon for banks a few decades ago, as it functionally gave them a huge ATM network for free.

The debit card system understands this sort of transaction, and doesn't charge the normal x% processing fee on the cash withdrawal portion of the transaction.

In other words, retailers can create transactions that are effectively ATM withdrawals - without an ATM.

In California they charge your debit card and return cash change. They even overcharge your card to ensure there is cash to give back. $5 or so.

This turns it into an ATM withdrawal apparently.

And the really nice thing about this is that there are no fees.

If I just need $80 or so (I think the limit is $100), it's faster to go to the local Walmart and buy a candy bar or something and get back $80 cash than to go the closest ATM owned by my bank to avoid the double dipping fees.

Our local grocery store (Fred Meyer, aka Kroger) has started charging a fee to take out extra and get cash back. Not a lot, but a bit annoying. I used to get cash that way all the time, but even for a nominal fee I just avoid that store now. I am weird, yes.

Yeah it makes sense there are no fees for cash back. Walmart doesn't want cash, they want to get rid of it as soon as possible.

The ATM has to be actually refilled with cash, so they charge you for it.

That doesn't really make sense. My bank's ATM has to be refilled with cash and they don't charge me. Likewise, I doubt the Walmart self-checkout is sorting bills and only dispensing $20's: they also have to be loaded with cash separately.

The only charges I encounter are from using my bank's card at another bank's ATM.

It probably depends on the type of account you have with the bank. I certainly don't pay ATM fees so long as I use my bank's own ATM but perhaps there are more bare-bones account types that do.