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Starting this week, Americans may find a new checkout fee on their receipts if they pay by credit card.
Retailers can now charge up to 4 percent for credit card transactions under a provision in a class-action settlement between retailers and Visa, MasterCard and major banks. The new provision took effect Jan. 27 and allows retailers to recoup the fees they pay to credit card networks for processing credit cards.
Retailers cannot profit from the surcharges, which affect only credit card transactions and not debit or prepaid purchases, according to the settlement that was reached in July. Ten states -- California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas -- ban these surcharges, so the settlement is moot in those areas.
So far, no major national retailer has announced a credit card checkout fee, says John Ulzheimer, president of consumer education at SmartCredit.com.
"I would be very surprised, too, because they compete on price," he says. "It's like them saying, 'Hey, we're going to raise our prices.'"
Instead, Ulzheimer expects to see the surcharge pop up at liquor stores, gas stations (where profit margins are notoriously slim as it is) and mom and pop shops that operate one or few locations.
MasterCard also doesn't expect many retailers to start charging these fees, either, says company spokesman Seth Eisen. But if they do, customers must be told in advance, he notes.
Retailers must disclose the checkout fee at the store entrance, at the cash register and on your receipt. Online retailers must provide the disclosure on their website.
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So the retailer adds surcharge to bill 2%. This brings up the total on bill thus Banks win again. All the amounts add up to favor banks
Will this amount added be subject to state taxes? Also, if I now have to carry larger sums of money, do I have to jump on the handgun bandwagon and purchase a concealed carry weapon to protect myself. Seems like this is also going to put more cash in the registers of small stores only to put clerks in further harm ways. Points to ponder!
It isn't true that most companies make a profit before they get to the bottom line. Many small businesses use it as the cost of doing business, and it comes OFF your profit. I quit using Square because their rate jumped .5%, and my business propay is still cheaper...watch those rates, they add up!
Go ahead and do it! It'll get me to stop charging and pay by cash or nothing at all!
Lets give the consumer more reason not to spend money. This will really bring up the economy Right!
Hey! WHAT DIFFERENCE DOES IT MAKE. Make it a dollar.It's just hard earned money.
Ridiculous! There goes the use of my credit cards. This is doing me a favor in getting rid of them. Thanks!
I completely disagree. It is not the businesses that are money hungry, it is the credit card processors. The rates and fees that are charged by credit card processor have ecsalated ridiculously over the years and in a small business that is very hard to swallow. I pay more a year to my credit card processor than I do to my store manager.
This is a cost of doing business and these costs are already built in to the prices. A business will not stay in business if they do not profit. If you think you are avoiding the price of using a credit card you are a fool.
It should be illegal! More states should jump on board and ban these surcharges. I see alot of unhappy customers taking their business elsewhere to avoid these charges. We are a money hungry world.