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Merchants Charging Fee to Cover Debit/Credit Card Fees

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Anonymous
Not applicable

Merchants Charging Fee to Cover Debit/Credit Card Fees

Do not recall if this is proper or not

 

In the outback area I live in effective to September 1, 2022  the merchants noticed that they charge 3.9% on every debit/credit transaction added to the cost of goods. The local merchants are: local bank, hair cutter, meat market, fueling station and now the local Ford dealer to name but a few.

 

Note, they say cash or paper check is "welcome".

 

Other merchants out of town also have added a floor (minimum charge) amount or it is cash only.

 

What say?  Smiley Frustrated

 

Is this allowed for in the Visa, Master Card, Discover or American Express Networks operating Terms & Conditions? Cannot remember.


Note, if it is not allowed, I will go around and collect business names and addresses and turn them all in.

 

Thank you @FireMedic1 always good to know! Smiley Sad

Message 1 of 23
22 REPLIES 22
FireMedic1
Community Leader
Mega Contributor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees

"U.S. merchants won the right to start charging fees on credit card payments on Jan. 27, 2013. This came after a who wanted to charge fees to compensate for increasing credit card processing fees. It's also important to note that we are only talking about fees on credit card transactions. These fees do not apply to transactions using debit cards. Even if those cards are backed by a credit card network like Visa or Mastercard."

https://thepointsguy.com/guide/merchant-charge-fee-pay-by-credit-card/ 

Happened to me last week to replace some fascia that tore off during the hurricane. 3.5%.


Message 2 of 23
Anonymous
Not applicable

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees

@FireMedic1

Thanks for the news and legal cite. Guess I can save the shoe leather! Bummed! Smiley Sad
Message 3 of 23
SouthJamaica
Mega Contributor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees


@Anonymous wrote:

Do not recall if this is proper or not

 

In the outback area I live in effective to September 1, 2022  the merchants noticed that they charge 3.9% on every debit/credit transaction added to the cost of goods. The local merchants are: local bank, hair cutter, meat market, fueling station and now the local Ford dealer to name but a few.

 

Note, they say cash or paper check is "welcome".

 

Other merchants out of town also have added a floor (minimum charge) amount or it is cash only.

 

What say?  Smiley Frustrated

 

Is this allowed for in the Visa, Master Card, Discover or American Express Networks operating Terms & Conditions? Cannot remember.


Note, if it is not allowed, I will go around and collect business names and addresses and turn them all in.

 

Thank you @FireMedic1 always good to know! Smiley Sad


In my opinion, its legality varies from state to state, and in some cases may turn on how it is worded.


Total revolving limits 569520 (505320 reporting) FICO 8: EQ 689 TU 684 EX 685




Message 4 of 23
FishingGuy
Frequent Contributor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees

It is my understanding that this can be done in most states at this point with just a few prohibiting this.  I believe it can be done as a surcharge on paying with a cedit card, a convenience fee or getting a discount for cash..... depending on how the account is setup & the terminolgy used. It must be appropriately posted at the location so customers are made aware of this prior to their purchase or dining in a restaurant.

 

In addition, Fire Medic is correct,  I believe this can be done on credit cards and not on debit cards.

Message 5 of 23
FireMedic1
Community Leader
Mega Contributor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees


@FishingGuy wrote:

It is my understanding that this can be done in most states at this point with just a few prohibiting this.  I believe it can be done as a surcharge on paying with a cedit card, a convenience fee or getting a discount for cash..... depending on how the account is setup & the terminolgy used. It must be appropriately posted at the location so customers are made aware of this prior to their purchase or dining in a restaurant.

 

In addition, Fire Medic is correct,  I believe this can be done on credit cards and not on debit cards.


@FishingGuyThat was a snippet from the article link I posted. I take no credit. Smiley Happy


Message 6 of 23
UncleB
Credit Mentor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees

I got a (mild) surprise a few weeks ago when I went to my local Krystal (hey, don't judge) and the amount I was told at the speaker didn't quite match the amount on my receipt after I paid. 

 

I went back a week later, and this time I noticed a very small sign at the bottom of the menu board explaining that a surcharge would be added to all orders paid with a credit card.  IIRC it was ~4%, so it basically canceled out the rewards on the transaction.

 

So far that's the only spot I've come across a surcharge, but it won't surprise me to eventually come across more (especially smaller businesses).

Message 7 of 23
Anonymous
Not applicable

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees

Well, I did expend some shoe leather and went to the local Ford Dealer. Told him the younger folks were not big into cash and the old paper checks! Said I would believe the old folks (we have many) would embrace the paper checks, but his future buyers are not going too! He agreed and said they can just pony up the 3.9% that Visa/Mastercard were charging all the merchants. Reminded him about bad checks and he said nothing!!!

Did not move his thinking one bit! I did remind him unlike many of the small businesses, his bills were large! The results, he was ticked off at me for the conversation!  Smiley Frustrated

 

In fact, I believe one of the Forum Posters mentioned they were running into the surcharge thing in the notheastern part of the United States (outside major areas). Just wondering what the hey...? Smiley Surprised

 

Dislike paper checks and cash, I dribble it away! Smiley Sad

Message 8 of 23
ptatohed
Valued Contributor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees

In California, a retailer can not charge a surcharge to consumers who pay with credit card.  However, they can give a discount for cash.  So, when you see the 'Credit' price and the 'Cash' price on a gas station sign, in theory anyway,  the credit price is the actual price per gallon and the cash price is the discounted price. 

 

 

Cal. Civil Code §1748.1

(a) No retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means. A retailer may, however, offer discounts for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers.

 

[ Signature in dire need of updates. It's on my to-do list. Smiley Wink ]


5% CB rotating: ;
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Everyday 5%: ;
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Retired to sock drawer after AOD (kept alive w/ 1 purchase every 6 mo): ;
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Message 9 of 23
CashOutReFi
New Contributor

Re: Merchants Charging Fee to Cover Debit/Credit Card Fees


@ptatohed wrote:

In California, a retailer can not charge a surcharge to consumers who pay with credit card.  However, they can give a discount for cash.  So, when you see the 'Credit' price and the 'Cash' price on a gas station sign, in theory anyway,  the credit price is the actual price per gallon and the cash price is the discounted price. 

 

 

Cal. Civil Code §1748.1

(a) No retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means. A retailer may, however, offer discounts for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers.

 


California's solution is make EVERYTHING more expensive! 

Message 10 of 23
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