Most Retailers Shy Away from Credit Card Surcharge
A number of major retail chains and associations are assuring consumers that they will not implement a surcharge on consumers making a purchase by credit card.
When customers use a credit card, the retailer is charged an interchange or swipe fee. Credit card companies prohibited merchants from passing on that surcharge, but that changed with a ruling this past July. As part of a $7.2 billion settlement, retailers were allowed to pass on that fee to consumers using a Visa or MasterCard beginning on January 27. The fee could be up to 4 percent of the transaction.
But a number of retailers have gone on record saying they will not implement the checkout fee, including Walmart, Target, Macy’s, Sears, McDonald’s, The Gap, JC Penney, Neiman Marcus, Home Depot and Lowe’s.
“Merchants have no desire to surcharge and no plans to surcharge,” J. Craig Shearman, a vice president of the National Retail Federation, told The Record. “The concept of widespread surcharging is purely card industry propaganda.”
For now, it appears that the fee will not be widespread for several reasons.
Many retailers fear that passing on the fee would put them at a competitive disadvantage to other stores that may not impose the fee.
In addition, the fee is not allowed in ten states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Under the agreement, a retailer that has stores in these states where the surcharge is illegal is prohibited from imposing the fee in states where it is legal.