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NJ seeks to ban checkout fees

By Janna Herron · Bankrate.com
Tuesday, February 5, 2013
Posted: 2 pm ET

A New Jersey bill that bans retailers from charging a fee to consumers for using a credit card goes to a state Senate vote on Thursday.

The legislation is in response to a preliminary class-action settlement between retailers and Visa, MasterCard and major national banks that allows retailers to impose this so-called credit card checkout fee. Retailers were allowed to charge this fee starting Jan. 27.

The surcharge allows retailers to recoup costs that Visa, MasterCard and the banks charge them for processing a credit card transaction, called a swipe fee. Typically, these swipe fees range from 1 percent up to 4 percent of the purchase total. The settlement allows retailers to pass this cost onto customers directly, rather than just building the cost into the price of goods and services.

The bill -- which must be approved by the state Senate and Assembly and signed by Gov. Chris Christie before being enacted -- would make New Jersey the 11th state to prohibit such credit card surcharges, including neighboring states Connecticut and New York. That was one of the two reasons the bill was introduced, says state Sen. Nia Gill, who was one of the primary sponsors of the bill.

"Since New York and Connecticut already have bans on such practices, we would be potentially driving business out of the state of New Jersey if we didn't ban the activity," Gill says. "You could easily go to New York and purchase the same item as in New Jersey but not pay a surcharge."

The state senator also said that she wanted to protect consumers' rights as well. She called credit card surcharges "unconscionable" and said New Jersey citizens were "outraged" by the possible practice.

Retailers that violate the ban could be fined up to $10,000 for the first offense and up to $20,000 for any subsequent offense under the proposed New Jersey bill. However, New Jersey gas stations will still be allowed to offer cash discounts to customers paying with cash, says Gill. That is a long-standing practice and backed by the state attorney general's interpretation of current law, she says.

Gill says she will continue to monitor credit cards and fees and consider what input the state can have on those practices.

Do you want your state to ban credit card surcharges?

Follow me on Twitter: @JannaHerron

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32 Comments
Gloria
February 05, 2013 at 6:50 pm

I would like to see Pennsylvania as well as other states to follow suit with New Jersey. If businesses want to past the pice on to customers then they should just say we do not accept credit cards. This would send the customer elswhere and that would be costly. But why charge the customers when all the business has to do is not accept the cards and save the customer and the business from their complaints. Why should we pay because they can't say no we don't accept the card. Then they will forget about this if they think the customer is paying and will continue they will raise the rates again. We need to not accept cards if we have a problem with the amount of fee it cost the business to have more customers.
I for one will be at the bank every pay day to take out my money and forget the card it will have no use for me anymore. I refuse to pay the fees!

Ronski
February 05, 2013 at 6:48 pm

Let consumers decide! Stop enacting laws to control EVERYTHING. If you don't want to pay the fee then go somewhere else or use cash. I don't want your credit card fees built into my cash sale which is exactly what has gone on for years.
I have my own business where we process about $20K a month in card transactions, our fee averages 3%. So there is $600 a month I have to make EVEYRONE pay for. Our sales are about 50% cash so even the cash customers are paying 1.5% for credit card fees when they don't even use a card.

CB
February 05, 2013 at 6:42 pm

It is all about choice and much to do about nothing. Most major retailers announced they would not impose such fees. If you do your homework you will find CC without any annual fees and finally paying cash is not a bad idea, getting a discount and also controlling your spending. Good combination

Mike W
February 05, 2013 at 6:40 pm

It would be nice if the retailers that charge the fee were required to post a large sign on their front door so there would be no surprises. I was charged a credit card fee from a rental car last week on top of the already to many fees they have

GaryD
February 05, 2013 at 6:33 pm

I'm in the service business, if you want 3.5 - 4% of my gross income show up for for work at 7:30 am! Now we ask if your paying by check or CC, then we add 4% for your "CC convenience".

If that doesn't work, we will increase the cost to all, so everyone pays for the CC fees. The CC companies want an annual fee, a monthly fee and then a percentage fee. Dump them...

Dave S.
February 05, 2013 at 6:03 pm

OK, let's break this down. I pay a fee to open my credit account, an annual fee to maintain my credit card account, a fee to use my card at a business, a fee that's already built in to the merchandise when I buy an item at a business, the credit card companies get a fee from the merchant for accepting credit cards at the business, and they get a fee for my balance due each month. At what point do we get to say enough's enough?

Ann
February 05, 2013 at 6:01 pm

I personally agree with Phil. I don't think banks should be alowed to charge the retailers a fee. These banks already charge excessively high fees/interest to their card holders. Credit Cards are nothing but a huge rip off and people need to do what they can to get rid of them.

Mark
February 05, 2013 at 6:00 pm

I love getting a discount for paying cash at the gas station...getting the same discount for paying cash at a pizza place, the grocery, or Wal-mart would be perfect...just go to the bank on Sat., and get enough cash to cover everything I am going to buy, and get an extra 1 - 4 percent off...seems like easy money for me...I might get rid of my credit cards altogether, except for maybe trips.

Dave
February 05, 2013 at 5:58 pm

Many consumers are enticed by the credit card rewards points so they charge everything on a card without thinking. We need to pull out the cash once in awhile. I agree card companies could care less about consumers except to get more fees annually or at each transaction.

little stevie
February 05, 2013 at 5:54 pm

Avoid the issue altogether and use the store credit card when you can. Major retailers began issuing their own in-store credit cards partly as a response to the fees they are charged by AmEx, Visa, etc. Plus they ususlly offer you a discount if you use theirs. But be aware that the interest rates on in-store cards are ususally very high...20% or more. So don't spend more than you can pay off once the bill comes due. If you don't think you can do that , there is always....cash.