Retailers not acting on credit card fee

A recent settlement in a class-action suit gives merchants the ability to charge customers a fee to process credit cards during purchases, although several major retailers say they do not plan to add the surcharge.

“We want to assure members that they can continue to make purchases with credit cards without being charged an additional fee,” said Brad McNabb, Family Trust’s Credit Card and Payment Systems Manager.

The settlement comes after years of litigation in a suit between retailers and credit card issuers and major banks. At issue were interchange or “swipe” fees charged by credit card companies to retailers to process credit card payments. Merchants now can pass that cost along to customers by way of the surcharge, sometimes called a “checkout fee.”

The ruling states that merchants cannot charge any more than the cost of processing the transaction – between 1.5 and 3 percent – and the fee cannot be over 4 percent. The ruling also requires:

  • This surcharge is completely up to the merchant and they must tell the consumer prior to the sale being completed.
  • Surcharges can be imposed only on credit card transactions, not on purchases made with a debit cards. Even if you choose credit and sign a receipt, you will not be charged as long as you are using a debit card.
  • Merchants must give the card companies a 30-day notice before adding the surcharge.
  • Merchants must disclose the credit card surcharge very clearly — at the store entry and the point of sale, or on the home page 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 (as opposed to the card issuer), 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 can offer a discount for cash and check purchases.

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.

Most merchants likely will not impose the surcharge, spokesmen for the National Retailer Federation have said in published reports. Wal-Mart, Target, McDonalds, Home Depot, Lowes and Macy’s have indicated they do not intend to add the surcharge.