Tibx2000

http://www.geek.com/articles/news/pa...ates-20130128/







Starting this week, you may get a bit of a shock when you go to pay for goods in stores across 40 of the US states. That’s because it’s now possible for retailers to pass on the credit card processing fee, or interchange fee, they pay on every transaction to their bank.



This surcharge can be anywhere from 1.5% to 4%, and it’s how companies like Visa and MasterCard make a good chunk of their money. But now, due to a ruling by a US District court, merchants can pass that charge on at the point of sale if they so wish, leaving consumers to pick up the unexpected extra charge.



There are a few exceptions to this rule. The surcharge can’t be applied in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, or Texas. It also won’t apply to anyone using an American Express card regardless of where you are in the US. And the surcharge is limited to credit cards, so you can pay with a debit card or cash to avoid it.



What remains unclear is how many retailers will actually choose to ask consumers to pay the surcharge. It’s expected the big name retailers won’t, but smaller companies are more inclined to, simply because of how big the charges can be. The surcharge also extends online, so make sure to check the total before clicking the pay button for an online transaction.



Discovering whether a retailer has decided to pass on the processing fee to you should be easy. Notices must be posted informing consumers to expect the additional cost when they pay. So you’ll probably see these displayed on counters in stores, or placed as a note in your basket for an online store.



While nobody likes paying extra, at least you can dodge the charge simply by choosing not to pay with a credit card. In fact, if enough people decide to do this it should make the credit card companies sweat a bit and maybe think about reducing their processing fees.



Why am I not surprised this is happening?

majik

This f*cking sucks. For people like me who rack up more than $5,000 in personal credit cards every month, this sucks a fat one.

$5,000 * 3% = $150 just to use my credit card every month?



No mention of Discover.



This sucks, because companies already have credit card fees built into their prices, so they would be making the transition just to increase their revenue and lower their costs, ultimately just increasing the cost on the consumer while corporate America gets fatter.



Now, for small local businesses I know they get raped by CC fees. American Express, for example, will take $0.32 for a simple fountain drink at my local Greek restaurant. I found out when the owner/cook/cashier asked if I would mind paying with anything besides my AmEx card. I would definitely not mind covering the transaction fees for the little guy.



I wish they'd apply this to different tiers of credit card companies based on their annual credit card charges. They already track that for PCI compliance purposes.

Stocker

Follow the bouncing ball of logic and don't get mad, people...

• Fees are charged to vendors.
  
• Vendors pass fees straight into price.
  
• Slushee costs $1 including $0.32 of fees.
  
• Fees are now able to be charged directly to customers.
  

Option 1: Charge $1.32 and lose customer

Option 2: Charge $0.68 and tack on $0.32 fee like you did before, but tell the customer



Which do you think will be most common?



The answer to the above question is strongly related to how smart you think your fellow merikins are when it comes to paying attention to the prices they pay for stuff every day.



I think, if prices were to skyrocket immediately the consumer would revolt - so prices might spike if they rise at all, then fall back to right where they were before the fees became transparent, for a net zero price change to the end customer. Which is also how it would work if the Fair Tax proposal were enacted.

i8acobra

First, the fees aren't 32%, they're about 1.5 to 4%. Second, this has nothing to do with vendors. This is to allow retail establishments to pass the credit card processing fees on to consumers. This is the fee that retail businesses pay when they swipe your card. Businesses lobbied for this so they can cut costs. Ever notice how your utility bills have a list of fees and taxes on top of the actual bill? When I was a kid, those taxes and fees were built in to the bill. When the utility companies separated out those fees, they didn't lower the bill, they put that extra money into something else, be it profits or infrastructure.

majik

AmEx actually has a flat fee per transaction amount + fees (like Paypal, $0.30 + 2.9% or something?). I recall the owner saying he pays $0.25 + the % fee for every transaction, so when I stopped in to grab a coke, he said $0.32 of the $2 going to AmEx. That would calculate to a 3.5% fee on top of the $0.25.

I don't remember the exact numbers, but it was in that ballpark. Whatever it was, it surprised me.

If I pay cash, he collects $2.

If I pay with AmEx, he collects $1.68.



I could see him passing on the fee to encourage people to pay with cash, the same way some gas stations offer a "cash discount" for fuel.

Stocker

A vendor sells items. Some vendors take credit cards. Some do it in a building and call themselves retailers. A credit card doesn't care if you call yourself a horse, so long as they get their transaction fees.





My imaginary small drink of previously unstated dollar value costs a dollar. 32 cents is 32% of a dollar. How is this difficult?



You don't know what they did to your parents' bills, or what the companies did to their pricing structure. .pdf link with data or you don't know. The kneejerk anti-business response does nothing to advance your argument.



You are trying to prove me wrong, but you agree with me and don't know it! You really should stop trying to win arguments with people when you agree with them.

i8acobra

They did it to MY bills. Not just my parents. I'm 40, not 20. I've been paying bills for a bit.



Amex is ONE company. The other THREE mojors don't charge flat fees. So, MOST of the time you're wrong. Again.

majik

I'm having difficulty keeping up with who's arguing. Is it only Stocker and cobra8tr? I wanna play, too!



A credit card company does care how many transactions and what dollar value you process. Look into PCI Compliance and the tier levels set, requirements per tier level for compliance, regulations and audit requirements for compliance, etc. This is what I do for a living.



Most of this is simple speculation until we see it happen, and I'm speculating that some businesses will indeed pass on the cost without lowering their prices - effectively harming the consumer as a result of this change. One behemoth I can easily see doing this is Sam's Club, who has always been picky as to which credit cards they accept.

majik

I would like it explained as to how the US District court can make this ruling, apply it to Visa and MasterCard and exclude AmEx completely... and how 10 states are exempt from the ruling. That makes no sense to me

Stocker

I don't know about Sams, but we shop Costco and they ONLY take their house-branded Amex. If they didn't lower their prices, and we saw a 3% or whatever fee added, their prices would no longer be competitive with our local grocery and they would get dropped like a stone.



Those States might have relevant laws already. I'm thinking legal technicalities are not why most people go to geek.com for news