4% Credit Card Surcharge “Checkout” Fee
According to CNN Money, retailers in 40 states can now begin charging a 4% credit card surcharge “checkout” fee. A $7.25 billion settlement is the catalyst for this latest attack on the “little guy.” The settlement, announced back in July, happened when Visa, MasterCard and nine other major banks settled to fix credit card processing fees with merchants. Part of the agreement noted that credit card issuers would reduce the fees paid by merchants when credit cards are used, but only until eight months after the settlement was reached.
Some retailers, like Walmart, Macy’s, JCPenney, the Limited Brands and more, joined a petition with the National Retail Federation, claiming the new tax threatens merchants’ priority to keep prices low for customers. Target and McDonalds have also said they will not burden their customers. Retailers will now have to choose if they take the burden upon themselves or if they charge customers the new tax. The following states will not charge the added surcharge: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas (of course I don’t live in one of these states).
It is important to note that this new surcharge cannot be enforced on debit card purchases.
I think this is just another example of regular Americans footing the bill so that companies can continue making large profits. I’m pretty sure that these large companies may not add the new charge, but they will just raise their prices to recoup the costs.
I think this new tax mostly hurts small businesses because unlike large companies they can’t burden the costs. This new tax will only make more people use their debit card. I personally hesitate using my debit card because unlike credit cards, it is much harder to recoup your money if there is fraudulent activity. Many merchants only guarantee up to $500. You get your money back faster as well, if fraudulent activity occurs on a credit card.
Will this affect you?
Do you use credit or debit cards?
*UPDATE: Sorry, forgot to mention that retailers who choose to impose this surcharge must CLEARLY present a notice of the fee at the store entrance and at each register. They must also denote the tax on your receipt. Otherwise they cannot legally charge you the fee.
Twitter: @adrakontaidis & @talkrealdebate