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Will Retailers Start Charging More Credit Card Purchases?

Friday, January 18, 2013 - 5:56 AM
You might see retailers start charging more when you use a credit card. Or they may give you discounts for paying with cash. That's due to the settlement of a lawsuit involving MasterCard, Visa and the major card-issuing banks. According to this Plain Dealer article, retailers will be allowed to impose "check-out fees" on consumers starting January 27. Those fees are expected to be between 2% and 3%. However, few retailers are expected to actually impose the charge.

According to this NYT Bucks blog post, these new fees won't take effect in the following 10 states which have laws against credit card surcharges: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

I didn't see any mention of gas stations and how they have been able to charge more for credit card purchases.
4
Ken TuminKen Tumin5,468 posts since
Nov 29, 2009
Rep Points: 125,029
1. Friday, January 18, 2013 - 8:22 AM
I'd be interested in a investigative article on which banks and or credit card issuers do plan on implementing the fees so that I can get rid of them. Story here might make whomever think about it if the issue is found to be talked about.

EDIT: Having read the linked article I may have jumped to soon in my comment. I still think it will be interesting to see how this plays out.
1
klinkklink98 posts since
Dec 8, 2012
Rep Points: 265
2. Friday, January 18, 2013 - 10:31 AM
Ken: The gas stations have technically not be charging more for use of a credit card. They played word games to skirt the law when they started that (it started in California when Arco stopped accepting credit cards, and other gas stations tried to match Arco's cash price), and present it not as an extra charge for a credit card but as a discount if you use cash. The law merely blocked an extra charge! Word games. (I never saw that challenged in court as being illegal as no different from adding a charge on credit card use.) 

Meanwhile, what, about two years ago Congress dropped the federal bar on fees for use for a credit card. (So, even with all the talk of the benefits to the country of getting people to go to a cashless society, they take steps to penalize people if they do so!) 

This lawsuit simply clarified whether credit card companies can contractually bar such fees. 

The idea from the get-go way back when was to move to a cashless society. Usage fees were barred accordingly. But, no one was making a merchant accept a credit card -- as Arco chose not to do (Arco also took other steps to cut prices, such as having only self-serve pumps). So, a merchant will only accept credit cards if they make more money by doing so -- that is, despite the fee they pay for its use, they still come out ahead by having that additional sales volume. If they don't come out ahead, they can simply stop accepting credit cards -- so what's the problem?

This whole bit about allowing usage fees on cards is nothing by gouging -- and only undermines any effort to move to a cashless society. It is no different than adding an additional hefty sales tax except that the money doesn't even go to additional government services.

I will note, the fee on credit cards, which is linked to sales volume, is in the vicinity of 1.5%, certainly no more than 2%. You can expect fees that might be tacked on to bee far and away more than that! And considering the major mall stores and many other retailers mark up their price about 100% over the wholesale price they pay, the credit card fee fee they pay is practically immaterial! ANd for that little fee, they get a great defense against being the target or robbers because they have a LOT less cash sitting in the store. And they can pay that mush less for handling the cash they do have. 
5
me1004me1004370 posts since
Jan 16, 2010
Rep Points: 2,567
3. Friday, January 18, 2013 - 3:01 PM
Well I hope all those gas stations and stores are paying for extra security or maybe making sure they hide their own firearms under the counter.  If they really do start taking in mainly cash for purchases, that is a red flag to the "bad guys" that they will have a greater choice of places to rob.  Seems to me accepting credit cards made it safer for them and their customers and the fees they might have to pay could be cheaper than being robbed and risking their lives having a gun pointed in their faces for the extra cash they will now have on hand.  Bad idea in my opinion.
1
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
4. Friday, January 25, 2013 - 4:09 PM
I heard over the news tonight that this credit card fee is going into effect this weekend.  Does anyone have a link to more details about it?  Thanks

BTW, I just got an email with a link to the Fox News Report on this fee which is supposed to go into effect this Sunday, 1/27/13 and it will be 4% fee extra on each purchase.  The link is:

http://video.foxnews.com/v/2119641363001/new-credit-card-surcharge-to-take-effect/?playlist_id=86929"

Please also note that it stated if one uses their Debit Card and does not put in the Pin and click "Debit" they will also be charged the extra 4%.
1
paoli2paoli21,367 posts since
Aug 10, 2011
Rep Points: 5,993
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