New rule allows service fees for credit card purchases
A surcharge to pay with plastic? New rules taking effect Sunday allow retailers to charge a service fee to cover the cost of processing a Visa or MasterCard credit card. That fee is capped at four percent.
The rule change is part of the settlement in a class action antitrust lawsuit against Visa and MasterCard and some big banks that process credit card purchases.
But will many stores do this?
"We really are not expecting to see a flood of surcharges now," says Ruth Susswein is with a consumer group called Consumer Action. "But what we're saying is that consumers need to be aware that this can happen. And if it does happen you must be notified in advance."
A brick-and mortar-store must post a notice at the store's entrance. The exact percentage of the surcharge does not need to be disclosed until the point of sale. The receipt must list the amount of the surcharge.
Online stores with a surcharge don't need to alert shoppers until they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.
The surcharge can vary based on the type of credit card. For example, it could be higher for a rewards card or premier card. American Express does not allow merchants to charge customers a transaction fee. A fee for using a debit card is still prohibited.
The rule change is part of the settlement in a class action antitrust lawsuit against Visa and MasterCard and some big banks that process credit card purchases.
But will many stores do this?
"We really are not expecting to see a flood of surcharges now," says Ruth Susswein is with a consumer group called Consumer Action. "But what we're saying is that consumers need to be aware that this can happen. And if it does happen you must be notified in advance."
A brick-and mortar-store must post a notice at the store's entrance. The exact percentage of the surcharge does not need to be disclosed until the point of sale. The receipt must list the amount of the surcharge.
Online stores with a surcharge don't need to alert shoppers until they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.
The surcharge can vary based on the type of credit card. For example, it could be higher for a rewards card or premier card. American Express does not allow merchants to charge customers a transaction fee. A fee for using a debit card is still prohibited.
Wow! What do they think they are? Banks? Oh yeah, that's a real cost to cover! Yeah let's just add that to our ridiculously high sales tax already! (sigh)
ODB was right Wu-Tang was for the children
So they get to charge the consumer and still write off their charges from the CC companies as a business expense? I don't see how this is fair for the consumer at all and I run a small business. Especially the part about how they don't have to tell you until check out online-it's not like there are many other ways to complete online purchases, except the few places that take Paypal. This is very frustrating.
@Angela Kuzior What is really frustrating is paying extra "service" fees so that companies like Macy's (enter any Rewards card retailer here) are able to pass the expense of their rewards programs to small retailers and small businesses (which you say you run).....Look at the whole picture please....knee jerk reactions are for the weak minded.
They always ask me Credit or Debit.. Welllll.. from now on its Debit.. because I get Social Security and every penny counts in my pocket..Â
Just another way to penalize the middle class. I think it sucks.
I thought they could already do this....Many stores in bellingham have been doing this for a while.
 @Jalharad They are not supposed to but they do it anyway since people rarely report it. This Sunday it will become moot anyway.