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New Credit Card 'Checkout Fee' Arrives This Weekend

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By Matt Brownell

Posted 6:00AM 01/24/13 Posted under: Credit Cards, Shopping, Consumer Protection
Credit Card Checkout Fee SurchargeThis Sunday marks the first day that consumers could start paying an extra fee just for using their credit card to make purchases. But don't panic: It's unlikely to kick in right away, especially at the biggest retailers.

First, a bit of background. The fee in question is widely described as a "checkout fee," and starting on Jan. 27, retailers will have the option of charging it on any purchase made with a credit card. The fee came about as a result of a settlement reached in July 2012 between merchants and credit card networks, and is intended to help defray the costs of the swipe fees charged by those networks. As such, it can't be higher than what the merchant actually pays as a swipe fee -- usually between 1.5% and 3% of the transaction.

The settlement was actually merchants' second swipe-fee victory in recent years. The first came in the form of the Durbin Amendment, which capped swipe fees on debit card purchases at 21 cents per transaction. The July settlement didn't cap swipe fees on credit cards, but it did give retailers the right to pass them on to consumers -- if they choose to.

"I don't think we're going to see a mass amount of surcharges come the deadline," said Ruth Susswein of Consumer Action, which has led the charge in educating consumers about the impending fee. Retailers, she says, are more likely to introduce the fee gradually. "It might creep into costs of shopping over time."

Indeed, it's still unclear whether the nation's larger merchants actually plan to take advantage of their new right to add surcharges.

"I would be very surprised if Walmart or Costco or Target or any of the other mega-discount retailers did something like this," said John Ulzheimer, president of consumer education for SmartCredit.com. "Their pitch is, 'Hey we're cheaper than the competition.'" Ulzheimer added that if a big retailer was considering charging the checkout fees, they would start out by testing them in a few select markets to see how consumers responded.

So if you do see checkout fees, it's more likely to be at smaller retailers, which tend not to be winning on price anyway. In fact, Ulzheimer noted, you've probably already seen small merchants charge a form of credit card checkout fee in the past, by offering lower prices to customers paying with cash -- for instance, at a gas station. Now that they're allowed to call the credit card surcharge what it is, more small merchants will try out variable pricing.

Tens of millions of customers will never see checkout fees, though. That's because 10 states have formally banned the practice, a list that includes California, New York, Florida and Texas.

If you don't live in one of those 10 states, though, you could potentially see signs alerting you about checkout fees as early as this Sunday. If you do, you can avoid them by paying with cash or a debit card -- or by taking your business elsewhere.
by on Jan. 24, 2013 at 9:24 PM
Replies (21-30):
frogbender
by Captain Underpants on Jan. 25, 2013 at 12:56 AM

Debit cards are different. Credit borrows from a line of credit. A debit card is basically like using a check as it comes directly from your bank account. 


Quoting TranquilMind:

 I have but don't use a credit card.  I was thinking more about debit cards, whether you would be penalized for using those that simply take cash right out of your own account.


Quoting frogbender:

Good thing I don't have a credit card. Those things creep me out with all their hidden fees. I'd rather earn credit other ways and not be in debt.





PlaysAllDay
by on Jan. 25, 2013 at 12:57 AM
The fee should apply to debit card purchases as well. I know we pay fees when our customers use debit cards.


Quoting turtle68:

 why is it better than a debit card?  I pay a flat accounting fee each month and if I press the credit button on the eftpos absolutely no fee charged.  I can buy online like its a credit card but with my money...cant use cash  I can imprint for hotels and car rentals just like a credit card...but cant use cash.


Debit cards are the bomb LOL


Quoting annabl1970:


 


 Cash is better.  It could be quite uncomfortable for large purchases though :)


Quoting turtle68:


 so in other words instead of the retailer paying the fee...the consumer should.


instead of the consumer paying fees on top of that to the credit card people..they will pay that AND the fee at the checkout.


That seems really nice that those two came to this conclusion...well done *insert eye roll*


People ...cut up the credit card and get a debit card.


 


 


 


Posted on the NEW CafeMom Mobile
TranquilMind
by Platinum Member on Jan. 25, 2013 at 12:58 AM

 Yes, I'm quite aware of the differences between a credit card and a debit card.  I guess I was unclear.  I'm wondering if the businesses will consider it a credit card for junk fee purposes if you choose not to put in your PIN.  I never use my PIN and always run all debits as "credits". 

That's what I meant. 


Quoting frogbender:

Debit cards are different. Credit borrows from a line of credit. A debit card is basically like using a check as it comes directly from your bank account. 

 

Quoting TranquilMind:

 I have but don't use a credit card.  I was thinking more about debit cards, whether you would be penalized for using those that simply take cash right out of your own account.

 

Quoting frogbender:

Good thing I don't have a credit card. Those things creep me out with all their hidden fees. I'd rather earn credit other ways and not be in debt.

 

 

 

 


 

TranquilMind
by Platinum Member on Jan. 25, 2013 at 12:59 AM

 

This is what I was thinking as well, because everybody runs debits as credits so they don't have to put in their PIN.  I'm betting they will hit the customer up here too. 

Quoting PlaysAllDay:

The fee should apply to debit card purchases as well. I know we pay fees when our customers use debit cards.


Quoting turtle68:

 why is it better than a debit card?  I pay a flat accounting fee each month and if I press the credit button on the eftpos absolutely no fee charged.  I can buy online like its a credit card but with my money...cant use cash  I can imprint for hotels and car rentals just like a credit card...but cant use cash.


Debit cards are the bomb LOL


Quoting annabl1970:


 


 Cash is better.  It could be quite uncomfortable for large purchases though :)


Quoting turtle68:


 so in other words instead of the retailer paying the fee...the consumer should.


instead of the consumer paying fees on top of that to the credit card people..they will pay that AND the fee at the checkout.


That seems really nice that those two came to this conclusion...well done *insert eye roll*


People ...cut up the credit card and get a debit card.


 


 


 



 

PlaysAllDay
by on Jan. 25, 2013 at 1:01 AM
1 mom liked this
Even if a PIN is used we are charged per machine transaction.


Quoting TranquilMind:

 


This is what I was thinking as well, because everybody runs debits as credits so they don't have to put in their PIN.  I'm betting they will hit the customer up here too. 


Quoting PlaysAllDay:

The fee should apply to debit card purchases as well. I know we pay fees when our customers use debit cards.



Quoting turtle68:


 why is it better than a debit card?  I pay a flat accounting fee each month and if I press the credit button on the eftpos absolutely no fee charged.  I can buy online like its a credit card but with my money...cant use cash  I can imprint for hotels and car rentals just like a credit card...but cant use cash.



Debit cards are the bomb LOL



Quoting annabl1970:



 



 Cash is better.  It could be quite uncomfortable for large purchases though :)



Quoting turtle68:



 so in other words instead of the retailer paying the fee...the consumer should.



instead of the consumer paying fees on top of that to the credit card people..they will pay that AND the fee at the checkout.



That seems really nice that those two came to this conclusion...well done *insert eye roll*



People ...cut up the credit card and get a debit card.



 



 



 





 


Posted on the NEW CafeMom Mobile
frogbender
by Captain Underpants on Jan. 25, 2013 at 1:03 AM


I have never been hit with a hidden fee when running my debit card as a credit purchase. I doubt that this will affect using your debit card. Unless banks change how much they charge a store to process the debit card. That is often why stores charge fees on credit cards, as the credit companies charge the store to process the credit card.

Quoting TranquilMind:

 Yes, I'm quite aware of the differences between a credit card and a debit card.  I guess I was unclear.  I'm wondering if the businesses will consider it a credit card for junk fee purposes if you choose not to put in your PIN.  I never use my PIN and always run all debits as "credits". 

That's what I meant. 


Quoting frogbender:

Debit cards are different. Credit borrows from a line of credit. A debit card is basically like using a check as it comes directly from your bank account. 


Quoting TranquilMind:

 I have but don't use a credit card.  I was thinking more about debit cards, whether you would be penalized for using those that simply take cash right out of your own account.


Quoting frogbender:

Good thing I don't have a credit card. Those things creep me out with all their hidden fees. I'd rather earn credit other ways and not be in debt.









annabl1970
by Platinum Member on Jan. 25, 2013 at 7:03 AM
Some banks charge $$ for using teller services. Go online:)


Quoting TranquilMind:

 Eh, I probably wouldn't do it.  I'd just think about it.  Everywhere here accepts - but discourages -checks, and if I can pay by check with no fee, I would do it if I was forced to shop at that store. 


I would probably just stop shopping there altogether, unless there are no options.  Junk fees drive me away.




Quoting canadianmom1974:

Most places here don't accept cheques. And I have no problem with my customers taking a long time counting their cash, it gives me a quick break.

But it's also good to know that you'll take your upset out on the front line worker who has no say in store policy about fees and charges.



Quoting TranquilMind:


Charge me to use my card and I will write you a check and slow down your line.



Or I will bring cash and count it out very slowly. 




 


Posted on CafeMom Mobile
Woodbabe
by Woodie on Jan. 25, 2013 at 7:22 AM

My card runs as either credit or debit...guess I'd better remember my pin number!


FrogSalad
by Sooze on Jan. 25, 2013 at 7:24 AM

My BIL owns a small business and has always said that if we truly want to support small, local business owners we should pay in cash whenever possible (because of the credit card fees owners have to pay).  Checks second and credit/debit cards last.

However, since he's in a college town, he's realistic to know that most of his customers are going to use debit or credit cards.

I rarely carry cash and use my debit card for almost all my purchases.  Some places won't accept checks any longer.  If I start getting "taxed" to use my debit card, I will have to reconsider my spending habits.

meriana
by Platinum Member on Jan. 25, 2013 at 9:47 AM

We use either cash or our debit card. I hate credit cards.   We tend to go by the "if you can't pay cash, you don't need it" idea. works well for us.

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