Think Twice When Paying With Your Credit Card: Up To a 4% Surcharge Coming
Yesterday we told you about a new fee that could be imposed by retailers if you buy with a credit card.
The so-called swipe fee, which could be as much as 4% of the cost of your purchase. The money would pay for the costs of processing your credit card transaction. Here's how a couple of my guests reacted on the show last night:
Guests from last night’s show were not fans and neither am I. The last thing any of us needs is another fee! Nobody wants to see a "surcharge" on their credit card bill.
And, you guys weighed in with some heated responses.
Here's an email from chris:
"4% on top of whatever you pay by using your credit card? We are already getting squeezed by higher food prices. Now it will cost 4% more to use your credit card? What kind of economy is this? Nickeling and squeezing every penny out of the already hurt consumer. I am thumbs down for the rule and would like to use my "other" finger to the retailers. Actually, times two."
But terms of a class action lawsuit settlement spell out clearly that retailers who plan to charge must notify customers of their plans to surcharge. Today, we decided to try to find out who might raise their tabs.
Target said no.
Here's what their spokesman sent us:
"Target has no plans to surcharge guests who use credit and debit cards in order to allow Visa and Mastercard to continue charging unfair fees."
Other big chains we contacted agreed with Target.
We even heard from one smaller merchant who said this:
"I would like to know if you have ever seen a merchant processing statement from the credit card processors which breaks down the fees we pay to process credit cards. You would understand the difficulty we face as small business.
We are the ones paying for their reward cards!"
Then we talked to one of the big kahunas in retailing, The National Retail Federation, who had this to say:
"The concept that merchants will start surcharging for credit card use is misinformation being spread by the card industry. The lawsuit was brought by merchants in an attempt to bring down swipe fees... and, in turn, the prices paid by consumers, not to increase the amount paid by consumers. Surcharging therefore would run 180 degrees to the intent of the suit.... while there can always be exceptions, merchants in general have no intention of surcharging."
It's that last part that bothers me... there may be exceptions.
According to the Federation, big chains will have a difficult time levying the fee because if any of their operations are in any one of the 10 states that doesn't allow the surcharge they can't charge in any store.
Even so, Kroger, a big grocery store chain with stores in some of those states say it's still weighing what to do.
"We continue to explore ways to incentivize customers to use lower cost forms of payment and have not made any final decisions."
Experts believe you will most likely see the surcharge at smaller merchants and bodegas.
So, once again, the little guy and the little business guy or gal gets the shaft.
My advice to you this weekend is that you scan all your receipts to find out whether you are being charged a fee for credit card processing.
I would be hard pressed to return to a merchant where I did get such a charge!