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Merchants are “double dipping” when charging checkout fees
One thing to consider in this debate: The price of credit is already being paid by everyone. The merchant’s overhead cost of processing credit is already part of the price of everything you buy, whether you use credit or not. The cost is built into the prices they set. So unless they first lower all their prices across the board for everyone, and only then charge a checkout fee to a customer paying with a credit card, this plan to add a checkout fee seems to be “double dipping.” Credit customers would be paying twice for the cost of credit.
Attention shoppers: Another credit card fee is here
It could soon cost you more to shop with a credit card at some stores. As of this Sunday, Jan. 27, merchants who accept credit cards issued by Visa and MasterCard will be allowed to add a service charge to the purchase price. The advocacy group Consumer Action has published a booklet on credit card checkout fees. It warns shoppers to be on the lookout for these fees and advises them to express their dissatisfaction.“Customers shouldn’t stand for it,” said Ruth Susswein Consumer Action’s deputy director of national priorities. “Our advice is to tell them you don’t like the fee and this makes you want to take your business elsewhere.”
Do You Pay Extra When You Swipe?
SmartCredit.com Consumer Education President John Ulzheimer and Pinnacle Capital Management’s Ryan Mack on how credit card users can avoid swipe fee.
Credit card checkout fees
The settlement called for merchants to receive $7.2 billion in cash and temporary reductions in interchange fees. This settlement also gave merchants the legal right to add a “checkout fee” when you use a credit card to pay for purchases. These fees could start popping up as soon as Sunday.
The rising cost of travel-card rewards
After tinkering with their credit-card rewards programs for the past few years, banks are now placing renewed attention on travel cards. Experts say the moves are partly a response to recent regulation. The Durbin amendment, which went into effect in October 2011 and is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, lowered the fees banks receive from merchants when consumers swipe their debit cards, but didn’t impact the fees for using credit cards. In response, many banks cut back on debit rewards while making credit cards more attractive by comparison.
Some retailers may impose a fee on credit card transactions beginning Jan. 27
The consumer advocacy group Consumer Action is urging people to be on alert for so-called checkout fees that some retailers could begin to impose on credit card transactions starting Jan. 27. Merchant trade groups contend most retailers, fearing customer backlash, will not charge the fee. But Consumer Action wants cardholders to be aware of the possibility and options for fighting back. “We’re not sure whether retailers are going to charge these fees,” said Ruth Susswein, deputy director of national priorities at Consumer Action in Washington, D.C. “They may not for competitive reasons. Some of it will depend on whether the other guy does it.”
Consumer Group Warns of Card Surcharges
The ability to tack on an extra fee to the receipts of consumers who pay with credit cards was one of the tools merchants gained as part of a deal reached in July intended to end years of litigation against the card networks and banks that issue credit cards.
Appeals Court Denies Request for Expedited Appeal in Swipe-Fee Case
A U.S. appeals court on Monday denied a request by Home Depot Inc. (HD) and other merchants to expedite the appeals process in an ongoing battle over a class-action settlement potentially worth $7.25 billion with Visa Inc. (V), MasterCard Inc. (MA) and several large banks. The Second Circuit Court of Appeals said it was deferring briefing for an appeal of the settlement until the deal receives final approval from the U.S. District Court in Brooklyn, where the litigation is currently pending. A ruling on final approval is expected next year.
Report: Free checking at big banks slowly disappearing
Stephen Wilson, chairman and CEO of Lebanon-based LCNB Corp., said he expects to see more banks following suit and adding fees as a result of the Durbin Amendment in the Dodd-Frank Act. The amendment caps the fee banks can charge per debit card transaction at 21 cents per swipe, less than half of what banks had been charging, in order to give more of the revenue to the merchants.
Dick Durbin Blamed for New Parking Tax
Last Thursday, Park Mobile USA Inc., the company in charge of D.C.’s mobile parking, sent out an email to customers explaining the fare increase thusly: “Beginning October 29th, transaction fees in DC will increase from $0.32 to $0.45 due to increased costs triggered by recent federal legislative reform enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act’s Durbin Amendment,” the company explained.
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