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Credit Card Swipe Fees Begin Sunday In USA 732

Posted by timothy
from the nickled-and-dimed dept.
An anonymous reader writes "A speedbump on the road to a cash-free economy will go into effect Sunday in the U.S., as retailers in 40 states will have the option of passing along a surcharge to customers who pay with credit cards. The so-called swipe fees arose from the settlement of a seven-year lawsuit filed by retailers against Visa, Mastercard, and big banks, who collect an electronic processing fee averaging 1.5 to 3 percent on transactions involving credit cards. The banks naturally have opposed the consumer surcharges, preferring that the extra costs to be passed along in the form of higher prices. Consumers in ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas) won't be affected, since laws in those states forbid the practice (it seems that gasoline station owners here in Massachusetts got a different memo, though). Also, the surcharges won't be collected for debit or prepaid cards."
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Credit Card Swipe Fees Begin Sunday In USA

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  • by drunkennewfiemidget (712572) on Saturday January 26, 2013 @01:23PM (#42701113) Homepage

    I wouldn't think twice about having the clerk go, "there's a surcharge for credit", to which I'd respond, "OK, thanks anyway." and leave.

    • by satuon (1822492) on Saturday January 26, 2013 @01:28PM (#42701149)

      What if their prices are lower than other retailers' with just the amount of the surcharge?

      • by drunkennewfiemidget (712572) on Saturday January 26, 2013 @01:33PM (#42701187) Homepage

        Well, realistically, I'd probably not have gone in the store in the first place if they implemented it, because I'd have hopefully done my homework.

        That said, I think it would be important that store owners have a chance to hear their employees go, "yea, I had to put 3x as much stuff back on the shelf today because people keep saying no thanks when they try and charge items to their credit cards".

        Other than groceries, I do very little shopping in-store now anyway -- I do most of my shopping online.

        • by AK Marc (707885) on Saturday January 26, 2013 @03:14PM (#42702185)
          Having been to places where they can charge surcharges, large chains with ties to the US, grocery stores and gas stations will not surcharge, but small restaurants and owner run shops will charge the surcharge.
          • by uncqual (836337) on Saturday January 26, 2013 @04:39PM (#42702877)
            The large chains probably have better deals with the credit card providers so pay less per transaction/sales dollar than the smaller places. This makes it more practical for the chains to include the credit card transaction cost in the product price.
            • by Ol Olsoc (1175323) on Saturday January 26, 2013 @06:54PM (#42703817)

              The large chains probably have better deals with the credit card providers so pay less per transaction/sales dollar than the smaller places. This makes it more practical for the chains to include the credit card transaction cost in the product price.

              It will be an even better deal when they can just advertise that they don't surcharge. I'll stop there first.

              • by N1AK (864906) on Monday January 28, 2013 @07:54AM (#42714085) Homepage
                I'll shop where it's cheapest, or the service justifies the premium, rather than irrationally ignore the best deal because of how the price is structured.

                A small sandwich shop for example could easily be losing 10% of the sale price to processing fees. If they think they can make more money and/or price more competitively by charging a surcharge then I'm happy to see them try.

                The UK has allowed and it doesn't really make much difference. Some smaller shops will only accept payment above a certain amount by card. Other, typically high cost but low margin, products will include a surcharge for using a credit card. Even if it doesn't become normal it at least gives shop keepers an alternative to refusing to take cards and that will hopefully stop the card providers gouging too much in their fees.
        • Then you should be mad at the CC companies and banks who have been sticking it to ALL OF US whether we used cash or credit than to the store who is trying NOT to assrape you if you pay with cash.

          The whole point of the suit was the banks and CC companies said "Fuck 'em, just raise prices across the board 3% and we'll BOTH make out" to hide the fees. Me personally I'd be MORE likely to shop there as I could always use my debit or hit one of the bazillion ATMs in town and not get stuck with the fees that we were ALREADY BEING SADDLED WITH thanks to these asswipe companies.

          • Right now, I use Debit most, along with occasional Credit and Cash purchases. If any of the three options offered me a cheaper solution somewhere(even 1%), I'd use that one almost exclusively. I'm not too worried about my card being stolen - I take responsibility for my money. If it gets lost or stolen and someone empties my bank account, I will dispute it, but consider it a lesson learned. With cash, if it's gone, it's gone.

            What I'd be most interested in is how merchants who run Debit transactions as a Cre

          • Yeah, this is true. For example Target pays $1 million each day to credit card companies due to fees. That's why they always try and get you to sign up for a store card, saving 5% on each of your transaction actually still saves them money overall. I doubt they'll switch to implementing fees now that they have the opportunity, they like to set their company policy nationally so as long as some major states have it illegal, they won't implement.

            This law is more about the Mom & Pop corner stores that have always had to have a $10 minimum for credit card fees, now it might be more convenient for them to allow credit cards for a bottle of soda, provided they can up the charge and not lose money on the sale. It'll also encourage people to switch back to good old cash that way.

            • Re: (Score:3, Insightful)

              by Anonymous Coward

              Yeah, this is true. For example Target pays $1 million each day to credit card companies due to fees. That's why they always try and get you to sign up for a store card, saving 5% on each of your transaction actually still saves them money overall.

              No it doesn't. There's no way they pay anywhere near 5% in fees. I ran a part-time small business, and my sales were miniscule...a few $K per year. I didn't have a card swipe machine (used a knucklebuster instead) which meant I payed a higher rate (over 3%). Plus since I called in my transactions over the phone (touch tone), they charged me an additional 99 cents per transaction (on top of the regular 40 cents). Even with all that, my average overhead for a credit transaction was something like 4.9%.

              The rea

          • by SQLGuru (980662)

            Except some banks are also charging you to use a debit card (trying to push you to push credit at the register). http://www.dailyfinance.com/2011/08/16/wells-fargo-3-debit-card-charge-a-sign-of-more-bank-fees-to-co/ [dailyfinance.com]

            So, now, you're screwed no matter what.

    • by p0p0 (1841106) on Saturday January 26, 2013 @01:31PM (#42701167)
      Doesn't matter. Working in retail I learned that individual customers are very much unimportant. Just because you come in every week and buy a couple things doesn't make you a valued customer and your business will not be missed. The majority of people will not care and will continue doing what they have been doing for years. Don't kid yourself in thinking your storming off will teach anyone a lesson. The clerk does not care (and they never do), the store does not miss your purchase, and the next customer moves ahead in line that much faster. Most often the clerk will joke about you with their colleagues about that guy who couldn't afford the fee and he got mad and left. Made us put his items away too. What a prick.

      Carry cash or use a debit card. Might as well make it easier for yourself than anyone else.
      • by drunkennewfiemidget (712572) on Saturday January 26, 2013 @01:36PM (#42701211) Homepage

        Actually, when the store owner has to start paying his employees more money to put shit back on the shelf, he may start rethinking if that money on the credit card fees is more worthwhile.

        I use a credit card for two reasons.
        A) If someone swipes/steals that information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
        B) Rewards programs. I get thousands of dollars a year in rewards. I put /everything/ on my credit card. Only thing I don't is my mortgage and that's just because I can't. I pay it off every month. Companies that are going to make this less advantageous for me are going to get less of my business.

        • by Anonymous Coward on Saturday January 26, 2013 @01:49PM (#42701325)

          I get thousands of dollars a year in rewards.

          Interesting... you get free money, and wonder why there may be fees now?

        • by agbinfo (186523)

          I use a credit card for two reasons.
          A) If someone swipes/steals that information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
          B) Rewards programs. I get thousands of dollars a year in rewards. I put /everything/ on my credit card. Only thing I don't is my mortgage and that's just because I can't. I pay it off every month. Companies that are going to make this less advantageous for me are going to get less of my business.

          If you think these benefits are worth it, why should others who don't benefit share the cost?

          I prefer to pay by credit card as well. It allows me to differ the payment and to get reward points. The problem is that it's not free. People that don't pay by credit card shouldn't be forced to pay as well - unless that's the store's policy. In that case people who insist on paying with a credit card will be free to find a better deal elsewhere.

          • Re: (Score:3, Informative)

            by DarkOx (621550)

            I use a credit card for two reasons.
            A) If someone swipes/steals that information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
            B) Rewards programs. I get thousands of dollars a year in rewards. I put /everything/ on my credit card. Only thing I don't is my mortgage and that's just because I can't. I pay it off every month. Companies that are going to make this less advantageous for me are going to get less of my business.

            If you think these benefits are worth it, why should others who don't benefit share the cost?

            Nobody held a gun to the heads of retailers and forced them to accept credit cards. They entered into these agreements with the CC companies in the first place because they knew they'd do more sales if they could transact more easily. If the customer is about to make an impulse buy but don't have the cash and must first find an ATM or bank, they might rethink the purchase and not come back. If a customer is using cash they generally have a much better idea of how much and how fast they are spending money

            • by 0111 1110 (518466) on Saturday January 26, 2013 @02:44PM (#42701851)

              I still don't see how offering a discount for cash or debit customers actually hurts you hardcore cc users. Cash/debit customers cost the merchant less. It's that simple. Their costs are up to 4% higher for cc customers. I don't see why cash customers should be forced to pay it just to give cc customers the illusion that using a cc is free when it isn't.

            • I agree with the grandparent as well those rewards programs can be VERY VERY good if your careful. Make sure you understand the fee structure on them, make sure you buy the right things on the right cards. Don't hate us players.

              In that case, you shouldn't hate those of us who will play the game and avoid the paying credit card fees by paying cash.

          • by jfengel (409917) on Saturday January 26, 2013 @03:07PM (#42702109) Homepage Journal

            Is it really a cost, though? According to Mastercard's income statement [yahoo.com], they earned $6.71B on revenue of $7.22B. That is, Mastercard is making plenty of money. Visa has similar margins. It sounds like their expenses aren't all that high, even with users like the grandparent post (and me) turning a profit on them by never paying any interest.

            With that much cash on the line, in a simple scenario, retailers should be able to push back and play them off one another for a better deal. They could keep the profits themselves, or pass it on to their customers.

            The retailers have good reason to want to encourage their customers to use credit cards. Handling cash is time-consuming and error-prone. The credit card companies are doing work for their share of the money (maintaining computers, accepting payments, sending bills, collecting, taking risks on default and fraud) but it sounds as if there's still a lot of room for retailers to push on them to get a service they want at a lower price than the one they're already getting, rather than having to pass a higher price on to the consumer.

            It smells like a monopoly power: cheaper competitors should arise, but aren't, due to ... what? High barriers to entry? Collusion?

        • by Alex Pennace (27488) <alex@pennace.org> on Saturday January 26, 2013 @02:00PM (#42701433) Homepage

          If someone swipes/steals [my credit card] information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.

          It isn't true that Visa eats the cost of fraud in most cases. When you want to reverse a charge, your bank and Visa/Mastercard happily oblige because they usually yank the money straight out of the merchant's account.

          You are right that the cardholder has much more leverage to reverse bad charges on a credit card versus debit. After I had left GoDaddy, they made the mistake of hitting my debit account for one more charge. Reasoning with GoDaddy didn't work, so I filed a chargeback through Sovereign Bank. Long story short, Sovereign proved to be completely unable to handle it, and I didn't have the leverage of saying I wasn't going to pay the disputed amount.

          Now, nothing has direct withdrawal rights to my money. No entity should have my debit card on file, nor any prior approval for ACH withdrawals. If they want to charge me every month, they do it on the credit card, or I can pay them via bill pay or (occasionally) check. I am aware that a sufficiently determined company can still get access to my checking account, but at least in that circumstance I can expect to be made whole in the end.

        • by Nimey (114278)

          You've never worked in retail, or you'd know that employees have to put stuff back on the shelves /all the time/. I worked in a grocery store many years ago and we had to put a full cart's worth of stuff back at least once a day - they were either dropped off at checkout ("I don't want this") or haphazardly shoved onto the wrong shelf when someone changed their mind & was too lazy to put it back themselves.

        • by caseih (160668) on Saturday January 26, 2013 @02:29PM (#42701699)

          Guess who pays for the rewards programs? That's right. It's the retailers. Credit card companies charge retailers more for the rewards program credit cards. You don't think Visa is actually giving you money do you?

          I use a business credit card with some huge multinational companies charging up hundreds of thousands of dollars in business each year. I don't feel too bad about taking airmiles from them. But I do feel bad about taking rewards from little mom and pop retailers. Visa had them over a barrel. If they wanted business they have to accept credit cards. But if they want to accept credit cards they have to do it on Visa's terms (until now), which were higher fees for rewards cards, and Visa would not allow them to pass any of those charges on. It's quite a racket, actually.

          • Re: (Score:3, Insightful)

            by Nimey (114278)

            I, probably like most people, had assumed that money for rewards came from interest (lots of people don't pay off their cards every month) and advertising.

          • by way2trivial (601132) on Saturday January 26, 2013 @02:59PM (#42702025) Homepage Journal

            I am a small merchant, I do take credit cards.

            Prior to change, of my 1.3 million in sales, about 900k was in plastic each year.

            3 years ago, I started offering a 3% cash discount (cash discounts were allowable all along)
            now my plastic sales come in under 400k, and my net sales are comparable....

            My guests decide to pay or not..
            some do it for the miles... some do it 'cause it's a work issued card... it works for me and my clientel

      • by Anonymous Coward on Saturday January 26, 2013 @02:04PM (#42701457)

        Thats why you work in retail and don't OWN a retail store. The owner knows that every individual customer is very important, and everyone that stops shopping at their store is money out of their pocket.

      • Re: (Score:3, Insightful)

        Not sure where you got this individual consumers don't matter but for small retailers "every" customer matters. I'm not talking about "the customer is always right" because I will tell someone to fuck off if they are unreasonable, oh a I do own a successful retail store. If the clerk does not care you haven`t taught your employees properly of they don`t respect their job/you/you business to care enough.

        Personally if I can make profit I will go out of my way to satisfy even the smallest customer. For example

      • by big_e_1977 (2012512) on Saturday January 26, 2013 @02:56PM (#42701995)

        Lets see here....

        Complete disregard for providing quality customers service. Check
        Arrogant attitude. Check
        Believe that providing a crappy shopping experience will not result in any financial repercussions for the company you work for. Check.

        I can only conclude that you are an employee of Best Buy.

      • by Khyber (864651)

        ""The clerk does not care (and they never do),"

        This is why the porno industry has lasted as long as it has in the face of the internet. While *YOU* as a retailer might not give a fuck, we *WANT* our customers to be happy, since that's, you know, part of the fucking business.

        Porn, doing what you lazy fucks can't do as a matter of courtesy, since FOREVER.

        "Doesn't matter. Working in retail I learned that individual customers are very much unimportant. Just because you come in every week and buy a couple things

    • by sjames (1099) on Saturday January 26, 2013 @01:57PM (#42701403) Homepage

      You do know you've been paying that fee all along don't you? It is the transaction fee the credit card charges the merchant. All this is is that they won a lawsuit invalidating the contract term that forced them to hide the fee in the form of higher prices for everyone (including cash customers).

      If you don't like the fee,, tell the credit card company "no, thank you", they're the ones charging it.

      • by spikenerd (642677) on Saturday January 26, 2013 @02:20PM (#42701605)

        If you don't like the fee, tell the credit card company "no, thank you", they're the ones charging it.

        Mod parent up. Visa has a near monopoly in taking a cut of all transactions, and you want us to get upset at all the retailers who don't want to submit cheerfully? Think about what you're trying to do for a second. As long as the Visa tax is hidden, no one can ever try to do it for less. Customers will always choose the bigger more-convenient card that works everywhere.

      • by DarkOx (621550) on Saturday January 26, 2013 @02:42PM (#42701819) Journal

        I think the point is he and I do like like the processing fee and we like the current system where is rolled into the retailers general expenses. Some of it gets kicked back to me in the form of rewards and other CC company giveaways. I am collecting an economic rent for all the idiots out there who can't get a credit card because they destroyed their credit; or don't use one because they can't manage money they don't hold in their hand physically. I like that fine.

  • by Art Challenor (2621733) on Saturday January 26, 2013 @01:26PM (#42701137)
    I wonder what it costs retailers to deal with cash? You have to count it, keep it secure, deposit it, etc. etc. More or less than the percentage for electronic transactions?
    • by John3 (85454) <john3NO@SPAMcornells.com> on Saturday January 26, 2013 @01:41PM (#42701261) Homepage Journal

      Believe it or not, in addition to the internal handling costs for a retailer to count cash there are bank fees. Most commercial banks actually charge businesses a fee to accept cash deposits. Yes, when I make a deposit of cash to the bank they charge my business a fee to count that cash and put it into their vault. In addition I must pay for change (rolled coin, singles, fives, and tens) and keep a stock of change in my business safe. We really love it when a customer pays by debit and gets cash back at the same time...less cash for us to handle at the end of the day.

      Cash also attracts thieves, hence the traditional targets for holdups are convenience stores and smaller businesses that don't do much (if any) credit card business. Years ago liquor stores didn't accept credit cards (might have been a law prohibiting it in NY, not sure) and they were always targets for late night armed robberies.

    • by Wowsers (1151731)

      Let's see. With cash, it's in your hand. In the digital world, you could have a certain company beginning with P (who think they are a bank but aren't) who decides that it doesn't like your haircut, then suspends your account without notice so the money you need for your business is now frozen. You might get it back some day, who knows when.

      If you don't want to take cash in store, don't cry when a card company stops payments and your cash flow freezes up. Litigate for the money? After your business has coll

      • by Kjella (173770)

        If you don't want to take cash in store, don't cry when a card company stops payments and your cash flow freezes up. Litigate for the money? After your business has collapsed? Cashless will never happen, although it's many governments wet dream as it will be able to track everything you spend your money on, and that's what they want.

        Here in Norway I'd say that if you won't accept cards you're dead as a business because so many use it for everything and simply won't have cash. Between electronic transfers, debit and credit cards they estimate 94% of all money transactions now go cashless. Personally I know the only time I tend to use cash is when I'm out drinking as you get rather sloppy with both card and PIN when you get drunk and even that's less of a hard rule these days if I'm just having a few beers.

        The main reason it's not 100% h

  • Oh dear! Oh dear! (Score:4, Insightful)

    by Let's All Be Chinese (2654985) on Saturday January 26, 2013 @01:28PM (#42701143)

    Credit card companies want to have their fees hidden, rather they'd have everyone else too pay for the fees they charge retailers of their lucky convenience-furnished customers. And that they no longer can? Honesty in retail, surely a big speedbump, yes.

    A speedbump on the road to a cash-free economy [...]

    And that's an issue, because everyone wants cash-free, Shirley. Because, uhm, cash doesn't carry your name and isn't subject to chargebacks, hallmarks of, er, what exactly?

  • by 140Mandak262Jamuna (970587) on Saturday January 26, 2013 @01:29PM (#42701155) Journal
    I think credit card companies charging 2 to 3% fees from the retailers for credit card transactions is fair, I think. They advance unsecured loans and assume the liability. But what is so unfair is these banks charge the retailers the same fees even when the buyers use debit card. This is practically cash, and there is no risk of default. The only cost to the banks is cost of collection and fund transfer. That is pennies at most. But still the banks converted the debit cards through credit card processing systems and charged the retailers this unreasonable fees. When there is no difference in cost most consumers scratch a signature on the Point of Sale terminals rather than punching in their 4 digit PIN.

    With this change, the retailers are going to give a 1 or 2% discount for people who use pin instead of signatures. Or even if they retain the savings themselves I would like the profit to go to my local retailer, not the too-big-to-jail banksters.

    • Re: (Score:3, Insightful)

      by sunderland56 (621843)

      2% for a few days? 2% for a week's float works out to a 180% interest rate. At what point do they stop being a credit card, and start being a loan shark?

  • I have a feeling people who live close to the 10 states where it doesn't apply might very well end up shopping across the border starting tomorrow.
    • by Spectre (1685) on Saturday January 26, 2013 @01:40PM (#42701251)

      Very true.
      Many, many people in Kansas City, which sits on the border of Kansas and Missouri, buy their gasoline in Missouri and the busiest stations are the ones just on the Missouri side of State Line Road, because the difference in gasoline taxes amounts to about seven cents per gallon.
      At current prices in the area, that's about 2%. So it is a fair comparison and a good predictor that people would likely do the same thing for credit card purchases.
      I would guess most people, though, could switch from credit purchases to debit card purchases for routine shopping.

      • by MBGMorden (803437)

        Many, many people in Kansas City, which sits on the border of Kansas and Missouri, buy their gasoline in Missouri and the busiest stations are the ones just on the Missouri side of State Line Road, because the difference in gasoline taxes amounts to about seven cents per gallon.

        A whole 7 cents per gallon? So, on a fill-up of a 12-gallon tank you're going to save 84 cents. If you figure $3.00 per gallon, a decent 30 mpg vehicle, and a two way trip, you're basically costing yourself money if you have to drive more than an extra 4.2 miles to to the "cheaper" gas.

  • by Vitriol+Angst (458300) on Saturday January 26, 2013 @01:42PM (#42701267)

    AS soon as consumers get the option to "Pay less in cash" -- because "pay more with credit" is more emotionally troubling, then the real cost of Credit Cards can be visible.

    They don't really pay anything, just the difference between accounts from other banks - -but they charge a hefty fee on retailers and charge interest (compounded) on consumers.

    There are new options that charge less, and they will get more prevalent if REAL COSTS are factored in. Not allowing retailers the option to pass on costs was only a benefit to the credit card companies -- it doesn't really save you money over time.

  • gas stations (Score:4, Informative)

    by neurostar (578917) <neurostar@noSPAM.privon.com> on Saturday January 26, 2013 @01:47PM (#42701305)

    (it seems that gasoline station owners here in Massachusetts got a different memo, though)

    Despite the fact that the outcome is similar, there's a legal difference between "surcharge for credit" and "discount for cash". The former is/was illegal, the latter is legal. Presumably gas stations in MA and elsewhere are doing the latter.

    • by Trepidity (597)

      The latter was actually banned under these merchant agreements also: they forbid credit-card users being charged a different price from the cash price, regardless of whether it was structured as a surcharge for one or a discount for the other. However, some states overrode that with state law that allowed different cash/credit prices in certain markets, the two most common being gas stations and liquor stores.

      In Texas, for example, merchants aren't allowed to give a cash discount in general, except that liq

  • by Gothmolly (148874) on Saturday January 26, 2013 @01:51PM (#42701343)

    So we kicked Iran out of the SWIFT international monetary system, and what did they do? Trade everything in gold to Turkey and China. We've lost the ability to track what they're buying.

    The government wants to track everything you buy - hell, Target wants to track everything you buy - and what this will do is make everyone use good old cash. After a while that 3% surcharge will feel like chump change to people who've lost their entire demographic database of purchasers.

  • by nimbius (983462) on Saturday January 26, 2013 @02:04PM (#42701453) Homepage

    to any sort of cash-free economy. this is a roadblock to multinational financial institutions continuing to exercise carte-blance restraint in the way they charge fees for their services. A cash free economy and a privately controlled electronic banking system are two different things.

    can we bite the bullet and conclude that electronic transfers and card based transactions are so ubiquitous as to become a right of the people? Grow some balls, amend a few laws, and lets make a national payment card system that works with our existing currency and doesnt require some per-swipe "fee" to pay for a server to connect to a database and decrement an integer over SSL.

    • Sounds like a good idea, but a law that cuts into the profits of those multinational financial institutions? This is the US we are talking about. Who wants to grow balls when it could have a negative effect on their campaign funding and/or future job as a lobbyist?
  • by orlanz (882574) on Saturday January 26, 2013 @02:44PM (#42701849)

    All this does now is slightly increase the cost to the credit card holders as it is just charging them rather than spreading it across the customer base. It also makes it very transparent to the consumer and becomes another factor in choosing to purchase at a certain retailer.

    Some retailers will choose to not pass on the cost to those generating it. Others will pass on the cost similar to a tax. Yet others will pass on the cost via discounts for cash and maybe debit. It will be interesting to see which of the prior wins. 2-3% isn't much, but today it does affect where people shop for gas. So I think it will have an impact on sales and retail is a low margin business.

    The whole point of credit is to increase volume. I think the retailers who do NOT pass on the cost will eventually win. Also the cost of manually handling cash is not small, just better covered up and has more unknown risk. So for small to some parts of middle level retail this may make sense as they already have the infrastructure for handling cash and it is underutilized. But for semi-large to large operations, any increase in cash transactions probably mean additional costs.

    For the former, they will choose the discounts for cash. The later will continue business as usual. I don't see my normal shopping retails like Walmart, Amazon, Kroger, and Target changing anything. But maybe Walgreens and CVS will go the Aldi way. I am a credit card guy so I will probably adjust by lowering the volume I do in the smaller group.

  • by ZipK (1051658) on Saturday January 26, 2013 @02:46PM (#42701881)

    Consumers in ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas) won't be affected, since laws in those states forbid the practice

    California law prohibits adding a surcharge for credit cards, but allows a discount for cash: California Civil Code Section 1748.1 [onecle.com]. So while consumers in California may not be affected by the change in national law, they're already subject to the possibility of a higher price when using a credit card - and unlike states that will now allow surcharging, California receipts do not break out the difference in price as a separate charge.

  • by Fnord666 (889225) on Saturday January 26, 2013 @03:04PM (#42702081) Journal

    Consumers in ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas) won't be affected, since laws in those states forbid the practice (it seems that gasoline station owners here in Massachusetts got a different memo, though).

    Visa/MC contracts still state that merchants have to have the same policy across their business. For larger chains that have a retail presence in these ten states, the prohibition on surcharging there means no surcharging anywhere else either.

    From NBCNews [nbcnews.com]:

    Visa and MasterCard have rules that require retailers to handle credit cards the same way in all of their stores across the country. That means a chain with stores in any of the 10 states where a surcharge is banned would not be able to have a surcharge at any of its stores.

    The settlement also states that merchants have to apply the same policy equally to their other cards that they accept, such as AMEX or Discover. Since AMEX still prohibits surcharging, if a merchant accepts AMEX they cannot surcharge for credit cards.

    From NBCNews [nbcnews.com]:

    The National Retail Federation points out that under terms of the settlement, a merchant who adds a surcharge to purchases on a Visa or MasterCard would have to do the same with American Express cards. But AMEX prohibits surcharge fees. So a merchant who accepts American Express as well as Visa/MasterCard would not be able to surcharge any of those cards.

  • by sandytaru (1158959) on Saturday January 26, 2013 @03:19PM (#42702223) Journal
    I'm in Georgia. Many small merchants here charge a 25 cent fee on any credit card purchase under $5, because they still have to eat the fee from Visa/Mastercard and for a $1 purchase, they'd make no profit. Or even better, one take-out restaurant gives you a 5% discount when you pay with cash. I expect more retailers will go along with a similar things in other states where this is now legal.

    On the other hand, merchants will probably eat the fee for very large purchases still. You can't expect someone to pay for a $1000 car repair in cash. Also, store-brand credit cards better not charge this fee. I have a Macy's card because I got 20% off my Christmas shopping last fall, but I'd happily cancel it and cut it up if they want to add on an extra fee for using it, instead.

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