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.