Credit card checkout fees: Does your favorite store charge them?

A recent settlement allows retailers to pass credit card acceptance costs on to consumers.

A surprise may be waiting for you when you shop at your favorite store or online merchant. As a result of a settlement between retailers (both online and offline) and the payments industry, consumers may soon begin seeing “swipe fees,” “checkout fees” or “surcharges” when using their credit cards.

Consumer Action reports that the settlement – reached in July between retailers, nine major banks, Visa and MasterCard – gives retailers the option to pass credit card acceptance costs on to consumers through checkout fees. The preliminary settlement was signed on Nov. 9, 2012, making the settlement terms effective in late January 2013.

“We know that merchants care about their customers and anticipate that they will not impose checkout fees, particularly because the value merchants derive from card acceptance far exceeds their costs,” said Noah Hanft, a MasterCard’s general counselor. 

The bottom line is that it’s still the consumer’s responsibility to understand and make decisions about their credit card use. Consumer Action advises there are steps consumers take to prepare for and manage the costs of checkout fees. Some steps are as simple as shopping around for retailers that don’t charge checkout fees or requesting discounts for alternative forms of payment. Linda Sherry, Consumer Action’s director of national priorities said, “One of our goals is to make sure consumers know their rights when these changes occur, and have enough information to be smart shoppers.” Consumer Action has published an online guide that explains consumer rights and retailer responsibilities, available on its Know Your Card website.

Forbes.com stated that there are some consumer safeguards to curb abuses, the Electronic Payments Coalition (which includes credit unions, community banks, and payment card network) noted:

  • Merchants are only allowed to assess a fee that is equivalent to what they pay to accept credit cards – which is typically between 1.5 percent and 3 percent.
  • Consumers can only be charged checkout fees for credit card usage, not when using a debit card.
  • Retailers must disclose the fee on the receipt, at the point of sale and at the point of entry, according to The Consumerist.

It’s important to be aware that different kinds of cards (such as rewards cards or premier cards) may have different kinds of fees, so be sure to ask your retailer in advance if different surcharges apply and choose your payment card accordingly. The Consumer Action’s guide, “Checkout Fees: Consumer Rights and Retailer Responsibilities,” contains more detailed information.

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