BBB consumer tip: New merchant surcharge may appear on credit purchases
Most people have gotten used to charging purchases, large and small, on a credit card.
Just by swiping the card people avoid the hassle of carrying cash. Look carefully; the Better Business Bureau reports consumers may notice a new fee on their receipt. Retailers are now allowed to pass along to consumers the cost of processing credit cards — though few have, to date. The Better Business Bureau of Minnesota and North Dakota (BBB) is advising people they may be able to save themselves money simply by staying vigilant.
It’s called “merchant surcharging” and it’s permitted in most states. As of Jan. 27, consumers may be charged up to 4 percent on each transaction and, similar to sale taxes, merchant surcharging can be automatically added to the bill.
After a while, if more retailers choose to tack on this surcharge, these charges could add up, so consumers may want to reconsider how they pay for goods and services.
Why now? Well, merchants have long been charged a processing fee by the credit card companies when consumers chose to charge their purchases. Previously, the fee could not be passed along to customers. However, as a result of litigation, merchants in the U.S. and its territories may pass that fee along directly to U.S. customers using credit cards (but not debit or prepaid cards).
What can consumers do?
• Use cash for smaller purchases.
• Look for notices about merchant surcharges; retailers are required to let you know so you can decide beforehand if you want to pay with a credit card.
• Use a credit card for online purchases when greater protections are needed that credit cards offer.
• Get into the habit of monitoring bank accounts and credit cards accounts online.
• Several states banned merchant surcharges: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. In other states, it’s optional, and will vary from store to store.
For more information on managing your credit, check out BBB’s “Managing Credit – Made Simple” at bbb.org/credit-management or www.bbb.org.