KALAMAZOO, Mich. (WOOD) - Recently a ban was lifted on merchants choosing to assess a surcharge (1.5-4% of purchase amount) when consumers choose to make purchases with their credit card. This type of fee is not placed by financial institutions such as ours, but rather the merchant who is attempting to pass on fees assessed to them when processing payments made via credit cards.
The ban was lifted on January 27, 2013 as a result of an anti-trust suit settlement between Visa, MasterCard and nine other major banks to fix credit card processing fees with merchants. Part of the agreement noted that credit card issuers would reduce fees paid by merchants when credit cards are used, but only until eight months after the settlement was reached. Now that that time has passed, merchants have an option to impose a "checkout" surcharge fee
Here are some important points to consider:
• Most major retailers are indicating no likelihood to implement a surcharge, and even most small, local retailers will not be implementing this fee
• It is not applicable for debit card purchases regardless if you choose to enter your PIN or sign for the transaction as a "credit"
• This fee is prohibited in 10 States (CA, CO, CT, FL, KS, ME, MA, NY, OK, TX) – so if the retailer operates business in any of these States, they're not allowed to assess fee in any other State
• If a retailer chooses to implement a surcharge, they must do the following:
1. Post a warning sign at or near the store entrance (or website) indicating the "Checkout Fee" amount
2. Itemize the fee on the transaction receipt
3. Retailers cannot discriminate card types to charge the fee (example – they cannot fee Visa, but waive for Discover)
Continue to shop at your local retailers! This cost of business is certainly one that we need to recognize and consider when making purchases, so being aware is one of the best tools available to you!
All content is meant for information purposes, and not intended to provide as legal advise.
For more information on credit card surcharges visit Community Federal Credit Union online at www.1stcomm.org or call 269-382-9866.
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