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 cardbeginning January 27, 2013. Please be advised that merchants who choose 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 – normally between 1.5% and 3% of the transaction amount.
- Surcharges can be imposed on 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.
Visit the links below for more information on checkout fees:
- www.knowyourcard.org (Developed by Consumer Action and Visa)
To see our previous blog post on checkout fees, click here.