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Planning on paying for something with a MasterCard or Visa card today? You may be forking over a little more dough than you expected.
That’s because new “checkout fees” may start popping up in 40 states today as the result of concessions made by the two major networks in their $7.2 billion swipe fee settlement with retailers last November. As part of the agreement, merchants who accept MasterCard or Visa payments can charge a checkout fee up to the equivalent amount they must pay to process the card payment. In most cases, that ranges between 1.4 and 4 percent, notes BankCreditNews.com.
Due to different state laws, merchants will be forbidden from charging the fees in 10 states, several of which are among the leaders in population. Those states are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
Charging the checkout fee is completely optional, and there’s reason to believe many merchants will opt not to do so. Retailers will have to post notices of the fee increase at the point of entry, time of purchase and on the receipt, and customer backlash is a real possibility. That being said, the ability to charge the checkout fee is one of the few victories merchants feel they achieved through the settlement, which has been roundly panned by many on the retail side of the industry.
Consumers will have to take a wait-and-see approach to determine if their local merchants will take advantage of the checkout fee, and whether such businesses do will likely be contingent upon what the competition does in many areas.
What do you think? If you live in a state where the fees are applicable, would you change your spending habits if faced with the fee? Would you shy away from using your card as often? Let us know in the comments below.
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I would absolutely change to a different merchant if the fee was charged. Alternatively, I'd pay with cash if an alternative merchant was not available. The fees are already baked in to the merchant's existing pricing scheme. If they added the fee it would simply be another money grab,
Thankfully I live in New York where the fee is not allowed; but if I lived in a state that did I would not change using the card as often, I would change the merchants I buy from.
CO doesn't allow this, so I would expect they will find a workaround. Most likely the costs of all purchases will increase slightly. The net result will be a few more cents of the cost of everything I purchase, so they can offset the use of plastic. I may have to go back to checks, or cash to compensate, and negotiate at the checkstand.
I would most definitely take my business elsewhere ... and require the merchant to show me how much they are paying in fees to validate the amount of the surcharge. I am afraid that given the mainstream media's shouting about the 4% maximum from the rooftops, that many merchants will believe they can simply add on that amount to the tab, without following the other rules (30-day notice to issuer/acquirer, posting at entry, and posting at POS, and splitting out the amount on the receipt). It is also interesting how merchants who indiacte that they are not going to abuse their customers in this manner can now get "credit" in the media for not surcharging.