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As of Sunday, Jan. 27, store owners in most states will be able to charge shoppers a surcharge for credit card use.
As of Sunday, Jan. 27, US store owners in most states will be able to charge shoppers a surcharge of up to 4 percent of the bill for using a credit card, ABC News reported.
The change is due to a legal ruling in a US district court last year that determined merchants have the right to pass along fees that credit card issuers charge them to their customers, Time Magazine reported.
Stores typically pay banks an amount equivalent to 2 percent of the purchase price when a shopper uses a credit card, Time Magazine reported.
According to Time Magazine:
For low-margin businesses like supermarkets as well as mom-and-pop stores that don’t have the clout of their big-box brethren to negotiate lower rates, these fees cut into profits in a big way.
Stores intending to charge customers for paying with credit cards will have to post a sign at their entrance or homepage, if they’re an online retailer, Time Magazine reported. They don’t have to disclose how much the fee will be until the point of sale.
The new customer charges are not permitted everywhere, ABC News reported. Shoppers in the following ten states are off the hook: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
Shoppers paying with debit cards or American Express cards will also be exempt from the new surcharges, ABC News reported.
Industry experts don’t expect surcharges to be common, at least at first, NBC News reported.
“In the brick-and-mortar world, no one who does any sort of volume business is going to want to surcharge because it will drive their customer crazy and slow down transactions,” Ed Mierzwinski, Director of Consumer Programs at US PIRG, told NBC News.
It’s likely that many small retailers will decide the surcharge is not worth angering customers, ABC News reported.
But as Edgar Dworsky, founder of ConsumerWorld.org, told NBC News, few retailers surcharged for credit card use in Australia when it first became legal there in 2003. Now, he says, about one-third of Australian merchants, including hotels, supermarkets, department stores and utilities, slap on a fee for putting it on plastic.
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