Credit Card Surcharge

Discussion in 'Money & Finances' started by Tony Page, Jun 10, 2022.

  1. Tony Page

    Tony Page Veteran Member
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    I've noticed more and more stores in my area are adding the 4% surcharge to your bill for use of a credit card. If you're using cash you will not be charge this surcharge, as a matter of fact some stores are given 10% off if you use cash.
    I'm a little confused I checked online and from what I found store owners are being charged 1 1/2 to 3 1/2 % by the credit card companies why are they allowed to charge above their cost?
    Why aren't these charges just added to the "cost of doing business".
     
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  2. Beth Gallagher

    Beth Gallagher Supreme Member
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    I haven't seen that in our area. I do remember some gas stations used to have different pricing for cash purchases but even that seems to have gone by the wayside.
     
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  3. Tony Page

    Tony Page Veteran Member
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    I'm not an expert on this my understanding is the state has allowed stores to charge up to 4% because credit card companies have raised their prices.
    Okay so they have a surcharge but it should be only what they are paying to the credit card companies.
     
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  4. Thomas Stillhere

    Thomas Stillhere Very Well-Known Member
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    Debit cards are protected from frivolous charges by federal law., passed on the same bill that allows a CREDIT card to be billed for like a minimum purchase. Debit card is like cash and it is abused by people who either do not know the law or just like to steal your money. So for anyone to charge 4 percent on your DEBIT card is the same as stealing. Nuff said ;0)
     
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  5. John Brunner

    John Brunner Senior Staff
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    At one point, I thought that charging different prices violated the MasterCard merchant agreement (meaning giving a Cash Discount punished cardholders.)

    This article states that a 2017 SCOTUS ruling (based on Free Speech, no less) permits charging the customer these fees,but that the fees must be the lesser of 4% or the actual amount levied by the credit card processor; in other words, the merchant cannot make money on this, and the merchant cannot charge more than 4%, even if the merchant pays more than that. The merchant must clearly disclose the fact that there is a surcharge before the transaction...whatever that means.

    As of Sept. 14, 2020, 10 states and Puerto Rico have laws prohibiting merchants from charging these fees. These states are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. Minnesota prohibits merchants from imposing surcharges on credit cards they themselves issue to customers (for example, Target couldn't impose a surcharge on RedCard transactions).

    I just checked a Food Lion receipt, a Harbor Freight receipt, and a Lowes receipt. None of them are tacking on the fee here in Virginia (or at least in my region.) These receipts are from 2 different counties, with one of them being in an incorporated city.
     
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  6. Tony Page

    Tony Page Veteran Member
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    It's confusing State & Federal laws don't agree.
    When the state first past the law that Merchants can charge a surcharge we in this area only had a pizza store that was doing it, now many Mom and Pop type stores are doing it. I haven't seen any of the larger retailers bike Home Depot, BJ's using the surcharge yet.
    I believe a lot of these stores would have been out of business had it not been that they accepted credit cards.
    There are only two stores that I've been to in 30 mile range that do not accept credit cards. Both are popular privately owned breakfast restaurants.
     
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  7. John Brunner

    John Brunner Senior Staff
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    I was just reading a little more about this, and it occurred to me that for years my county government has levied a fee when folks chose to pay their taxes with a credit card, and I've always been fine with it; after all, everyone else would have to eat the cost, and the fees would be a direct reduction of tax revenue.
     
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  8. Tony Page

    Tony Page Veteran Member
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    I don't mind paying a fee if the merchants are being charged for these transactions but I do mind being overcharged.
     
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  9. Tony Page

    Tony Page Veteran Member
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    Here on Long Island the cost of goods has supposedly increase a little over 8%.
    The Dollar Tree which is a popular Dollar Store raise their prices $1.25 for all their goods, that's more than the 8% price increases so they are doing much better and they did before I'm sure a lot of their products haven't even gone up at all in price.
     
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  10. John Brunner

    John Brunner Senior Staff
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    Keep in mind that I grabbed that from an article on the web. Who knows how accurate (or current) it really is.

    I, too, have a couple of mom & pop eateries that only take cash or checks. I would never infer their motive is that credit card deposits into a business account would make revenue easier to track, because I'm not that cynical...really, I'm not. And they are always so jam-packed they could not handle more business even if taking plastic achieved that end. It is interesting to watch those who are not used to such a business scramble to find an ATM. I mean, who walks around with absolutely zero cash on their person?

    So do the businesses around you that levy this fee have prominent signage that you can see before making the purchase?
     
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  11. John Brunner

    John Brunner Senior Staff
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    They're are only supposed to cover costs, not profit on it. That article I linked has a link to where you can file a formal complaint.
     
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  12. Tony Page

    Tony Page Veteran Member
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    Most do have a sign indicating they have a surcharge.
    Yesterday went to a bakery they charge 4% for using a credit card & gave10% discount for cash. I used a debit card, which a prior post indicated this should be no charge because a debit card is the same as cash.
    How does that work when they have to pay their taxes I paid their credit card bill I bet they'll still use it as a deduction.
     
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  13. Tony Page

    Tony Page Veteran Member
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    I would never hurt a small business they would have to do something really bad for me to make a complaint. It's more I'm annoyed the Government makes these stupid laws, when any increase in price to the merchant could have been covered with a slight increase in merchandise.
     
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  14. John Brunner

    John Brunner Senior Staff
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    They have to write a check to the credit card company for the fees (or more to the point, the fees are withheld from the deposit the processor makes).
    They have to declare the money you pay them as income, even if it is a cost-reimbursement.

    The two wash.
     
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    Last edited: Jun 11, 2022
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  15. John Brunner

    John Brunner Senior Staff
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    The thing is, cash carries risk. No criminal is gonna hold up a store (or wait at the bank night deposit) for credit card receipts. There are lots of technology drivers that have reduced crime in the past decades. Going cashless (or reducing cash exposure) is one of them.
     
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