It’s a bummer that the newly announced 4% 'checkout fee' was approved, and unfortunately we, as a Credit Union cannot do anything about it. This added fee is 100% on the Merchant’s end; they make the decision if and how much they’ll charge. In light of the expressed frustration of many, we hope to answer some basic questions about the new fee and fill you in on what we know.
As of Sunday, January 27th, 2013, stores can pass the cost of payment processing on to the customers who use a MasterCard or VISA credit card. The merchant can charge anywhere between 1.5% and 4% per transaction; news sources say typically you’ll see the tax between 1.5% and 3%, but it absolutely cannot be higher than 4%. For example, if you bought a new shirt for $50.00 using your credit card, a retailer could charge $52.00 for not paying with cash or a debit card.
There are ten states that are not legally allowed to impose the surcharge, including:
California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and . Likewise, during the settlement some retailers had the option to not charge the new tax on its customers – so a bit of good news is that not everyone will be implementing the surcharge. Texas
Q: How will I know if I'm going to be charged?
A: Merchants and retailers are required to clearly disclose that they will be implementing the credit card surcharge as well as the amount. Look for a sign when entering a store, check your receipt, or online - look on the checkout screen or the homepage.
Q: If I use my debit or check card and select 'credit' rather than debit, will I be charged?
A: No! No matter how your debit card is processed after the sale, surcharging is not allowed unless it is a CREDIT CARD. This new fee does not apply to purchases made with a debit card, so feel free to continue selecting the 'credit' option when using it!
Q: What stores won't charge me?
A: Various larger retailers like Target, Wal-Mart, McDonald's, Macy's, Toys-R-Us, JCPenny, the Limited brands, and more 'vowed' not to tack on the extra tax to their consumers in any state. Some claimed that "the new tax threatens merchants' priority to keep prices low for consumers."
Q: Why did this new surcharge happen?
A: The new checkout fee is a result of one of the largest anti-trust settlements in U.S. history. According to Huffington Post Business News, "In 2005, a group of merchants claimed that MasterCard, Visa, and nine other companies including JP Morgan Chase & Co. conspired to fix the fees that stores pay to accept credit card purchases". As a result of the case, "the merchants are allowed to charge customers a fee equal to the cost of the accepting card".
For more information, visit http://tv.msnbc.com/2013/01/28/credit-card-users-could-get-socked-with-4-checkout-fee/
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