It may soon be a reality
A long battle between merchants and credit card issuers has resulted in a settlement in favor of the merchants. And while both of those parties will be directly affected, an indirect third party may get the worst of it all – the consumer.
Last week, the seven year battle between merchants and credit card issuers and credit card payment processors (such as Visa and MasterCard) regarding swipe fees has come to an end. Not only did the merchants get over $6 billion from the credit card companies, but they also have an agreement that will result in a temporary reduction in the swipe fees they have to pay to their banks for accepting credit cards as a form of payment.
The part of the settlement that can really stick it to the consumer is the change in the agreements merchants have with payment processor networks. Whereas previously a merchant was prevented from adding a surcharge to customers purchases if they decided to pay with a credit card, that stipulation is now gone. This means retailers can now tack on that surcharge to consumers’ purchases.
The retailers’ argument? They are now allowed to pass along the cost they incur for accepting credit cards on to their customers — which to them is only fair. The consumers’ argument? Since retailers have already been restricted from adding this surcharge for all these years, the cost of accepting credit cards should already be baked into the prices of the goods for sale — Adding a “credit card” surcharge to purchases would only make consumers pay more and line the pockets of the retailers.
Retailers claim they will lower prices – which is a bit hard to believe, seeing as there has been little evidence that prices have been lowered or discounts have been offered since debit card swipe fees were capped last year.
There is a small silver lining for some consumers though. Currently ten states have laws on the books that do not allow credit card surcharges. So if you live in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, or Texas, you should be safe…that is unless government officials from any of these states decide to change the law.
So make sure to keep informed on this topic, and definitely make sure to double check your receipts for any surcharges – you may be in for an unwelcomed surprise.
What do you think of the ability for merchants to now add a credit card surcharge? Will you just pay the fee, decide to use cash or a debit card, or find another store that doesn’t add the surcharge? Let us know!
