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I just read this on my Credit Union website's "news". So, I have assumed that part of the markup at a store included their allowance to pass on their costs to the consumer. So, can we expect the prices to drop by 1.5 to 4% since they can now add it directly at the end of the transaction? Duh, I think not. Maybe we need a settlement between retailers and customers.
Credit Card Surcharge to Take Effect January 27
As a result of a recent court settlement between retailers and the credit card industry, merchants can now pass along their payment processing costs to consumers who pay with a credit card beginning January 27, 2013. Please be advised that a merchant who chooses to exercise this surcharge, sometimes referred to as a "checkout fee," could subsequently increase your credit card purchase amount by as much as 4% (the maximum allowed).
Under the settlement:
-The surcharge cannot exceed the amount that the merchant actually pays to accept credit cards – between 1.5% and 4% of the transaction amount.
-Surcharges can be imposed on commercial and consumer credit card transactions only, not on purchases made with debit cards or prepaid cards.
-Merchants must disclose the credit card surcharge clearly – at the store entrance and the point of sale or on the homepage if the merchant does business on the Internet.
-The disclosure must include the amount of the surcharge, the fact that the fee is being charged by the merchant, and that the fee does not exceed the merchant's cost to accept credit cards.
-The dollar amount of the surcharge must appear on the transaction receipt.
Merchants are not allowed to impose a credit card surcharge in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma or Texas, where such fees are prohibited under state law.
This really not anything new, a lot of places on line ask for 3% or so if you use a credit card, if you rent a vacation home through VRBO or Homeaway, chances are you will be asked for credit card fees. Many places will not take an American Express because their fees are higher than VISA or Mastercard. Some smaller retailers are pushed for profitability and 2.5% to 3% can make a big difference.
Preception has been that, for competitive reasons, merchants will not adopt surcharges widely. The existence of bans in certain large states also makes it very difficult for the largest retailers to do it since they cannot be uniform across the country.
I just read this on my Credit Union website's "news". So, I have assumed that part of the markup at a store included their allowance to pass on their costs to the consumer. So, can we expect the prices to drop by 1.5 to 4% since they can now add it directly at the end of the transaction? Duh, I think not. Maybe we need a settlement between retailers and customers.
Credit Card Surcharge to Take Effect January 27
As a result of a recent court settlement between retailers and the credit card industry, merchants can now pass along their payment processing costs to consumers who pay with a credit card beginning January 27, 2013. Please be advised that a merchant who chooses to exercise this surcharge, sometimes referred to as a "checkout fee," could subsequently increase your credit card purchase amount by as much as 4% (the maximum allowed).
Under the settlement:
-The surcharge cannot exceed the amount that the merchant actually pays to accept credit cards – between 1.5% and 4% of the transaction amount.
-Surcharges can be imposed on commercial and consumer credit card transactions only, not on purchases made with debit cards or prepaid cards.
-Merchants must disclose the credit card surcharge clearly – at the store entrance and the point of sale or on the homepage if the merchant does business on the Internet.
-The disclosure must include the amount of the surcharge, the fact that the fee is being charged by the merchant, and that the fee does not exceed the merchant's cost to accept credit cards.
-The dollar amount of the surcharge must appear on the transaction receipt.
Merchants are not allowed to impose a credit card surcharge in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma or Texas, where such fees are prohibited under state law.
Well, I guess I have nothing to worry about, but it sucks for the other states.
For some reason, I see other states passing similar laws in the near future.
It will be interesting to see if the CC companies do anything to defray this additional charge.
I will certainly start using cash more often if the 1% to 4% fees exceed the 'cash' back' bonus points
Thankfully, my two main states make it not yet a big concern
In this retail environemnt those that can forgo the surcharge and keep price lower will reap rwrods just like anytime one can bet higher prices. The must show the charge is the key.Most will not do anyhting different in hiding the charge cost in the retail prices:IMO.
Funny thing though is that they say the fees were built into the retail price.
Yet both cash and credit customers paid the same price.
Now with the fee separated will there be a lower price since the fee can be collected separately ?
Somehow I think not.
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