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When customers use credit cards, it costs retailers money, and some businesses have started charging customers additional fees to help offset that expense. While it is almost unheard of to charge someone for using a debit card, Weaver Enterprises Ltd., which operates more than 20 Kentucky Fried Chicken restaurants, including the one in Newton, has begun doing just that.
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.
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.”
SmartCredit.com Consumer Education President John Ulzheimer and Pinnacle Capital Management’s Ryan Mack on how credit card users can avoid swipe fee.
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 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.”
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.