Hey guys, I just wanted to give you a quick head’s up about something that went into effect on January 27. If you pay with a Visa or MasterCard for a credit card purchase, merchants in 40 states now have the right to charge you an up to 4% surcharge for doing so. These new fees are called a “checkout fee.” Debit cards are not affected. This new surcharge is a result of the class-action settlement reached in July 2012 between merchants and credit card companies & banks. Terms of the settlement include Visa, MasterCard and several different banks and credit card institutions paying a group of retailers $6.05 billion and allowing them to charge an extra credit card fee beginning January 27, 2013. 4% is the maximum amount that is allowed to be charged under the settlement. The states where this fee is not allowed to be charged are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
As you probably already know, all retailers who allow customers to pay by credit card have to pay a service fee to the credit card companies themselves. This is why certain “mom & pop” type stores will sometimes only accept cash or other businesses will institute a minimum amount for credit card purchases. Credit card companies claim that they charge merchants this fee to accept them because it helps take into account any money lost for nonpayment or fraud.
According to the Electronics Payment Coalition, any merchant who decides to hit customers with a surcharge for using Visa or MasterCard will have to follow three guidelines:
- Post notification of the surcharge on their storefront;
- Post signage at the checkout register alerting consumers to the fee;
- Include the surcharge on their receipts.
Just something to be aware of – some stores already take their own credit card usage fees into account and mark up their prices to make up for it. These stores are not required to lower prices, so technically, they can raise prices and charge the surcharge at the same time, allowing them to “double dip,” so to speak. As of right now, merchants such as Target, Wal-Mart, Home Depot, Rite Aid, and Sears do not plan on adding the surcharge, but rather are waiting to see what the fall out of the new fees will be.
This is just something I wanted everyone to be aware of! Spread the word to anyone you know so they can be on the lookout too.
