Be Aware of Credit Card Surcharges


As a result of a legal settlement to resolve claims brought by a group of U.S. merchants, merchants in the U.S. and U.S. territories may add a surcharge to certain credit card transactions starting after January 27, 2013. This surcharge, also known as a checkout fee, is an additional fee that a merchant can add to your bill of sale when you pay with a credit card. U.S. merchants that surcharge are required to limit the surcharge fees to credit cards only, meaning they cannot surcharge debit and pre-paid cards. They must also limit the amount of the surcharge to the applicable merchant discount rate for the credit card transaction surcharged. A cap of 4% is currently in place, but that may vary. Additionally, companies must disclose the actual dollar amount of this surcharge on every receipt and disclose the fact that they charge a surcharge fee at the point of store entry and at the point of sale. Most likely, you will not see this change until February because of the 30-day notification and registration process that is required.

How will you know if a business is charging the surcharge? Merchants may charge this fee at their discretion. When you’re in a store, look for signs or postings when entering the store and at the cash register that warn you of the merchant’s fee. If you see this notification, consider using your Members 1st Visa Debit Card or a Members 1st Pre-paid VISA instead of your credit card. Unlike credit card transactions, merchants cannot charge any surcharge fees on debit or pre-paid credit card transactions.

If you suspect you’ve been hit with excessive surcharges or that your debit or pre-paid card was charged, visit www.visa.com/checkoutfees and complete a “Report a Merchant Violation Form.” Alleged surcharging will be investigated.

This new law only applies specifically to “credit card” products. Continue to use your VISA Debit Card as CREDIT at the merchant – you want to continue to earn your monthly Swipe 5 cash-back rebate. A debit card is a debit card whether you use it as “debit” or “credit.” If merchants attempt to charge you this fee when you are using your debit card as “credit”, they will be in violation and may be subject to a fine. If anyone has any issues with this moving forward, please report them to our Card Services Group at (800) 283-2328, ext. 6035.

Currently 10 U.S. states have surcharging restrictions including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Consumers who are subjected to checkout fees in states where those fees are prohibited by law may want to discuss this with the retailer or report the retailer to their respective state’s attorney general’s office. Keep in mind that Members 1st is not the entity charging these surcharge fees on your credit card purchases.

For additional information about payments and surcharging: www.visa.com./checkoutfees or call our Card Services Group at (800) 283-2328, ext. 6035.

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