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Retailers can charge you an additional 4% credit card “checkout fee”

Home - by - January 28, 2013 - 18:15 America/New_York - 23 Comments

(credit: CBS 2)

WyBlog

Get ready to pay 4% more for your purchases if you use a credit card in New Jersey and 39 other states. Starting today retailers are permitted to add a “checkout fee” to your bill, to cover the merchant fees banks charge them on credit card transactions.

And who do we get to blame for this? Why the Dodd-Frank financial regulation reform law, of course. It’s one of the many “consumer friendly” provisions instituted by Senator Elizabeth “Fauxcahontas” Warren’s Consumer Financial Protection Board in response to a class-action lawsuit recently settled by Visa and MasterCard.

Visa, MasterCard and the nation’s biggest banks have agreed to pay $7.3 billion to millions of merchants to end a seven-year dispute over credit card “swipe” fees. The settlement includes at least $6.05 billion in payments to some 7 million merchants for past damages and a temporary reduction in fees valued at $1.2 billion.

The settlement agreement also would give merchants new rights to impose a surcharge on credit transactions, subject to a cap and other limitations. The rules governing such surcharges likely would be implemented in early 2013. Merchants also would be allowed to band together to try to negotiate better rates on the so-called interchange fees.

Here’s the best part:

“Over time, the reforms induced by this case and in this settlement should help reduce card-acceptance costs to merchants, which in turn will result in lower prices for all consumers,” said K. Craig Wildfang, a partner at Robins, Kaplan, Miller & Ciresi, and co-lead counsel for the plaintiffs.

Plaintiffs attorney Martin Lueck, chairman of the executive board of Robins, Kaplan, said the allowed “surcharge” is actually a pro-consumer provision of the settlement.

“Really it’s a discount that the merchants are now allowed to offer for the less expensive form of payments,” he said.

Only a lawyer could spin a surcharge as a “discount.” And only our “looking out for the little guy” betters in Washington, D.C. could enact a pro-consumer law that ends up costing us money.

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» 23 Comments

  1. Irish

    January 28th, 2013

    Will they take 4% off if you pay cash?

    Thumb up +7

     
  2. bubba

    January 28th, 2013

    bubba conducts all business transactions in cash. bubba does not like owing anybody.

    Thumb up +8

     
  3. grayscape

    January 28th, 2013

    How much money does the racist greedy lily-white fake indian get?

    Thumb up +1

     
  4. I like cash

    January 28th, 2013

    I like pulling out a big wad of bills. CCW? YES Try and take it.
    Make my day

    Thumb up +2

     
  5. Left Coast Dan

    January 28th, 2013

    I’m ok with it, free enterprise and all. Most vendors will probably leave the cost incorporated into their products, but some will certainly try it. Of course the way it came about is rather ugly.

    Thumb up +1

     
  6. DaveVA

    January 28th, 2013

    That 4% is fixed when we can’t use cash anymore.

    Thumb up +2

     
  7. Andrea Shea King

    January 28th, 2013

    I’ve been told by someone “in the know” that Dodd Frank is to the financial world as Obama’s “Affordable Health Care Act” is to health care. Both pieces of legislation are loaded with bombs just ticking down the time til they explode.

    It’s a horrid piece of legislation filled with shrapnel, each one guaranteed to cost us dearly.

    More to come!

    Noteworthy Comment Thumb up +10

     
  8. jclady

    January 28th, 2013

    There has always been a fee for using a credit card and this fee is built into the cost of the product or service.

    However, for years now I’ve asked plumbers, electricians, HVAC guys, etc., if they would reduce their charge by the amount of the fee if I paid with a check. I’ve never been turned down.

    Thumb up +7

     
  9. Mary Jane Anklestraps

    January 28th, 2013

    Heh. They’ll just figure out a way to outlaw cash.

    Thumb up +5

     
  10. Mr. Pinko

    January 28th, 2013

    Deal in cash with Conservatives only!

    Start asking “Did you vote for Obama?” then pay accordingly!

    Thumb up +7

     
  11. Geoff C. The Saltine

    January 28th, 2013

    Why is it when the banks make a mistake and over charge us, we, the consumer have to make up for the banks loss? If I am reading this right the banks pay the merchants ( for their loss or bank over charge) and then we pay 4% more plus, a surcharge [how much is the surcharge] to the retailer just to use our cards.
    No where in this is there a rebate for the consumer that was charged a .50 cent charge on their card just for using their card, unless it is the temporary reduction in fees for the card user?
    Screwed again by the idiots that make the laws.

    Thumb up +3

     
  12. listingstarboard

    January 28th, 2013

    Interesting that Massachusetts is one of the 10 States that outlawed a credit card surcharge, so they are exempt from it. Biden is in neck deep with the credit card industry.

    Thumb up 0

     
  13. Name Redacted™

    January 28th, 2013

    Merchants are always happier if you choose “debit” over “credit.”

    This is one more reason to avoid using credit cards. Maybe it will change our habits for the better. I guess I’m speaking for myself. :-)

    Thumb up +3

     
  14. MaryfromMarin

    January 28th, 2013

    @Name Redacted–

    You’re speaking for me, too. I’ve been working on reducing our credit card usage for a while now. Information like this will encourage me to pick up the pace.

    Thumb up +4

     
  15. Jethro

    January 28th, 2013

    Fine – I will avoid merchants who add the fee. Any merchant who doesn’t charge the fee for cash purchases I will pay in cash. The free market will flush this out. Frankly, I am sick of paying more for stuff so others can get credit.

    Thumb up +3

     
  16. jclady

    January 28th, 2013

    My mom is having $6400 of tree work done. I told her to ask if she gets a discount for paying by check.

    Yep.

    Thumb up +4

     
  17. NeeNee

    January 28th, 2013

    Large portion of US citizens don’t have “cash.” Which is why credit card companies overloaded with deadbeats & desperate/unemployed people aren’t publicized.

    Back in 2005, I started accepting Visa & Mastercard at my antique shop. Fee was $5.00 per month and 1.7% of the transaction, directly going to Mastercard because they were cheaper than the local banks. Oh, and I had to purchase the electronic swipe machine—$1,000. Fast forward to 2010: I get a notice from MC that because of the huge amount of credit card default, businesses have to start paying more. My monthly fees went from $5 to $30 and the per transaction jumped to 2.5%.

    Then I get still another letter saying my account will be hit for an additional $9.95 to combat fraud. Called them to find out exactly what this $9.95 charge will do for me: short answer, nada. “It may or may not prevent you from becoming a victim of fraud, but everyone has to pay their fair share.” Person at the call center said it was mainly to prevent employee fraud. I have no employees, just hubby & me. Didn’t matter. Person asked what I do with my copies of credit card receipts that have the owner’s signature & number. Well, I staple them to the page of the receipt book. Next question: how long do you keep them? Where do you keep them? I had to swear that all of these receipts would be shredded after a year, and before that they must be kept in a separate locked room, SUBJECT TO INSPECTION, & A $50,000 FINE IF THEY WEREN’T. No thanks. It took faxing my wishes to not participate, and my bank account had 3 months of unnecessary charges because they were “backlogged.” Finally spent $20 to block them. I also stopped accepting credit cards. Yes, I’m probably losing business because that also meant declining debit cards. But the vast majority of customers seem to have no difficulty paying cash or with check.

    Thumb up +5

     
  18. "That Guy"

    January 29th, 2013

    @jclady

    You may find that you can get an additional discount on those types of repairs if you pay cash, and don’t need a paper trail. ;)

    Thumb up +2

     
  19. TheJadedBarrel

    January 29th, 2013

    If suggested retail price is listed from publisher or manufacturer, how would a merchant (small retail store), pass the cost to customer without angering their costumer base?
    They do not pass it on, but eat it!
    This is one reason when shopping at a local small business I purchase with cash and I don’t ask for a discount.
    Between Banks, Disturbers (Oh.. will protect you from us selling to deep discounters by increasing your cost of product), State (collect taxes with out compensation), and shall I go on?

    Do I support this new law? Hick no.
    The bank is charging you (the customer) a fee for using the card, then charge the merchant for excepting it.

    Rant off.

    Thumb up 0

     
  20. TheJadedBarrel

    January 29th, 2013

    Sorry for the above.
    The point is this reg/laws (whatever) is protecting the banks for their double tapping. The politicians as usual or clueless

    Thumb up 0

     
  21. MNHawk

    January 29th, 2013

    I am for merchants being able to give cash discounts. That has been illegal.

    Some with their own arrangements (Costco, Target, ect) will probably not have their prices unchanged. Small mom and pops will now be able to compete, with cash only prices.

    Thumb up 0

     
  22. Unruly Refugee

    January 31st, 2013

    Walmart says they will not charge the fee.

    Thumb up 0

     
  23. JimBob

    January 31st, 2013

    I take credit cards post yur numbers in the comments.

    Thumb up 0