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Checkout fees take effect

By Janna Herron · Bankrate.com
Monday, January 28, 2013
Posted: 4 pm ET

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.

Follow me on Twitter: @JannaHerron

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57 Comments
lanijama
January 30, 2013 at 12:48 pm

I'm in WA state-so this fee applies. Solution: Use cash where fees are charged especially if you have limited income. To those small businesses, gas stations, etc, have mercy on those who really can't afford that extra cents, dollar, percentage fee.

John
January 30, 2013 at 12:06 pm

I will not be supporting any store that charges this fee across the board, though I do understand the comment from Tom on charges under $10. The fee structure includes a flat amount and percentage so the small business really gets hurt when someone uses a credit card for such small amounts.

Fred
January 30, 2013 at 11:58 am

I quit using debit cards and credit cards a little over two years ago. Nothing like CASH easier to keep up with and everybody takes it. Dump the cards and use cash.

Michael
January 30, 2013 at 10:35 am

Will this law stop gas stations for charging more per gallon if you ae paying with credit cards?

Paula
January 30, 2013 at 10:32 am

Personally, I will not be purchasing products at any of the stores that charge a fee. If it comes that all stores will be charging a fee then I will use cash. Shame on the credit cards that charge such fees anyway. Don't they get enough when you carry a balance!!!!

Tom
January 30, 2013 at 10:29 am

This works out Great for me a small business. But I will only charge it on sale under $10

Coleen
January 30, 2013 at 10:25 am

How is it that IF this has been banned in Califonia since July last year. Then tell me How is it that companies such as Gas stations ,Arco AmPm & some local bars are charing .45 to 1.50 to use your charge card. .45 on debit 1.50 on credit.. and how do we get them to stop..

Joanna
January 30, 2013 at 10:14 am

I plan on asking if the store if they charge the fee, if they do they wont get my business either cash or credit.

bran
January 30, 2013 at 10:08 am

You guys don't understand how expensive these charges can be for a small business. They are fighting to stay competitive in today's markets and when consumers use credit cards small businesses might end up loosing money or breaking even. You have to look at both sides before you make a judgment call. If a major retailer started charging its customers the surcharge I would be on board with the rest of you but for small businesses this is great. Consumers wont miss 4% of one transaction but a small business will miss 4% of its entire credit sales. Think about it.

Sam
January 30, 2013 at 10:08 am

This is perfect i wont spend money for stuff i dont need. In chicago they did no smoking in restaurents and over 30% closed, so if a store starts doing this that store will be the one taking effect or maybe that store will go out of business too.