WASHINGTON, Jan. 26 (UPI) — Starting Sunday, U.S. businesses will be allowed to pass credit card fees to their customers, which could mean higher prices for some goods and services.
The allowable surcharge ranges from 1.5 to 4 percent and depends on how much a merchant or service-provider pays in fees to the card companies, ABC News reports.
Gerri Detweiler of Credit.com said big chains, able to negotiate better deals with the card companies, may decide not to impose surcharges. Small businesses are more likely to take advantage of the law.
Detweiler said some business-owners may have trouble figuring out how big a surcharge they can impose: “If you think your own credit card statement is confusing, take a look sometime at a merchant’s credit card agreement with VISA or MasterCard.”
Stores are required to post notices at checkout of the surcharge. That would allow customers to pay with cash instead or use debit cards, which are not included in the law.
Ten states, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, ban credit card surcharges.
Dettweiler suggests anyone who objects to the surcharge should let the owner or manager of a business know. She said enough complaints could lead to businesses deciding to forgo the extra revenue in hopes of keeping more business.
Copyright 2013 United Press International, Inc. (UPI).
noooooo they are not FAYE we loose money
Part of the problem is more and more people pay with credit cards all the time. Our business used to be 10% credit cards and it is now 75% credit cards. That really increases the cost of getting paid by thousands of dollars a year. We have to constantly raise prices to cover the discount fees.
@Katie-what I understand is that this is a fee paid to the credit card company by the retailers. It has nothing to do with the amount of credit cards used. Our son is in retail and has complained about this for years. The credit card company’s (banks) make money from interest charged and then charge a fee for using the cards on top of the interest rates. Once again the banks are sticking it to us.
If a business grosses 1,000,000, and the credit card rate is 2,5%, you would pay $2,500 if 10% was cc or $18,750 if 75%was cc payments. You don’t have to raise your prices nearly as high to cover 10% usage.
The way I understand this from reading about it in the paper and on MSN is it does not include debit cards. Also, any chain with stores in the 10 states where it is illegal can not charge in any other state. Also, the cards they are most likely to charge for are the ones with the best rewards and lowest rates. It will be the small, local stores you will have to watch out for. Not saying they will do it, just that they can if they want.
I for one will not pay any more fees, the fee is already figured in the cost.
This is true I know one business that raised its prices just for this reason.