Did your favorite store charge you a little extra today?
Maybe, if you charged it as 181 million of your card carrying neighbors will.
Starting today, your local grocer or gas station or corn store can tack on a surcharge for credit card use but no one seems to care.
That surcharge is tied to a lawsuit settled last July. Visa, MasterCard and a group of other large financial firms agreed Friday to forfeit a total of $7.25 billion to settle a colossal anti-trust action. The defendants will offer cash payments worth $6.05 billion in total; Visa and Mastercard agreed to reduce their “swipe fees.” That’s the other $1.2 billion. As part of the agreement, retailers will soon be able impose a surcharge of up to 4% for credit card transactions in all but 9 or 10 states. Such surcharges will also apply to cardholders from other networks, like Discover and American Express.
The U.S. District Court decided that merchants can pass along credit-card interchange fees to customers. That contentious ruling is under appeal.
Permitting surcharges is a slippery slope. Consumer advocates agree.
Who knows? Phone and cable TV companies could decide to pass on “regulatory fees!”
“If a national sales tax of 2, 3, or 4 percent were being proposed, everyone would be up in arms.”
“The only reason everyone is NOT is that they haven’t a CLUE this is coming,” Rufus said. “I am guessing that what percentage they charge will be used as a marketing variable along with interest rates, and there will be substantial churning in terms of who uses what card.”
The change went into effect today.
Interestingly, Florida is one of the states with protection laws that prohibit surcharges; the others are California, Colorado, Connecticut, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. Arizona and Vermont are conspicuous by their absence.
More interestingly, there are plenty of gas stations right here in Florida that charge a surcharge (or at least a higher price) for credit card purchases than cash.
“I had NO idea this was coming,” Rufus said.
Actually there are gas stations up and down I95, not just in Florida, that charge a surcharge (or at least a higher price) for credit card purchases than cash.
I’ve gotten caught a couple of times but generally I will not buy from those stores. And I usually tell them why. Now I find out that it wasn’t just a bad business practice. It was against the law.
The Interchange fee cost is already built into pretty much everyone’s pricing, from Amazon and American Airlines to Zoom Telephonics (remember them?) and Dr. Zelazo. If a company offers me a discount off the existing price for paying cash, I might take them up on it but if they try to hold me up for 4% more when they are already hiding that in their cost of doing business, I’ll take my bidness elsewhere.
Anyway, watch your charges.