Is it legal to charge more for an item

[Roon]

if you pay with a debit card?

[huskerlaw]

1. I would think so.

I know it's legal to charge more if you're using a credit card...less for the debit or cash.

[Roon]

3. There is a store run by a bunch of nice Iranians here

and they started charging more for using a card. It just rubbed me the wrong way is all.

[sendero]

2. It's not a matter of legality..

.... but if Visa or Mastercard catch you doing it, they'll give you trouble.

It is ok with them to offer a discount for cash, not the other way around.

I will admit, I see sellers of certain merchandise on the net collect an extra 2% or 3% for CC, but I do know that the CC companies fought this battle a long time ago.

[flamingyouth]

4. Some stores charge a fee for small transactions.

For instance, if the transaction is under $5. Our little community store does.

[Roon]

5. OK

I just never heard of it before, guess I'll learn to live with it.

[tyedyeto]

11. Don't be a customer there anymore!

If they charge you more, then just tell them you will not be purchasing anything else at their store ever again.

[Xithras]

7. Lots of stores won't even let you use cards for purchases that small.

We have a small chain of liquor stores around here that sets a $5 minimum on ATM transactions, and charges a 45 cent fee for anything under $20. I've walked into countless stores where they have "No ATM under $X" signs posted onto the register. I never really thought twice about it before.

[Left Is Write]

9. If they take Visa and Mastercard, they're violating their contract.

Visa and Mastercard prohibit minimum purchase requirements.

[flamingyouth]

12. I was once told I couldn't use my debit card for a tiny purchase.

They then pointed me to their ATM, which had a $5 fee. :grr:

Needless to say, I was not happy and went elsewhere. The one time I didn't have cash on me and wanted a stupid bottle of water. :eyes:

On edit - This was out of town, not at the aforementioned store in my neighborhood, which I frequent.

[Left Is Write]

13. Hmmm...

I'd have gone elsewhere too...and maybe, if I was ticked off enough, I'd have told them I was reporting them to Visa/Mastercard.

[Midlodemocrat]

20. I have reported places to Visa/Mastercard/Amex.

And upon returning in the future, discovered that the signs proclaiming the surcharge had been taken down.

[Midlodemocrat]

19. Exactly and if they take Visa and Mastercard,

they can't charge you more for using your Amex. It is a violation of all three issuerers TOS.

[Xithras]

6. Yep, 100% perfectly.

Gas stations used to post one price for cash customers, and another for credit. Arco still tacks on 25 to 40 cents at their AM/PM's in California if you use their debit cards. LOTS of low volume stores also tack on fees.

For these small stores it's understandable, since they actually make less money if you pay with a debit card (the cc company charges the store a transaction fee). Typically companies counter it by charging a flat usage fee, but that's only because it's easier to track. Two different pricing systems is perfectly legal, but would be a huge pain in the butt to keep straight when reconciling inventory and profits.

[Left Is Write]

8. Some information...

Can the merchant charge credit card users more than cash customers for the same item?
In a word, maybe. In a few more words-- probably, if the merchant goes about it the right way.
The Federal Truth-in-Lending Act prohibited surcharges on credit card purchases until 1984; since then, there has been no Federal law on that subject. (Other provisions of the law are still in force.) The states of CA, CO, CT, FL, KS, MA, ME, NY, OK, and TX have laws against surcharges, according to Bankcard Holders of America.

Discover allows surcharges on credit card purchases, except in the above states. Visa and MasterCard prohibit them. American Express discourages them in general, and specifically prohibits them by merchants that also take MasterCard or Visa because Amex doesn't allow merchants to discriminate against it.

There is a loophole: merchants are allowed to give cash discounts. This means in practice that they can't charge you more than the labeled price if you pay by credit card, but they can charge you less if you pay cash. Some companies announce (usually in tiny print in the catalog) that all prices "reflect cash discount" of x% so credit card users must pay x% more than the stated price. This may be legal but it certainly violates the spirit of the law or the regulations. I don't know about the "service fee" charged credit card users for things like ordering tickets over the phone, but they're certainly not allowed to charge you a higher price in person than if you pay cash.

There is another loophole according to Bankcard Holders of America (BHA). Certain government agencies are not allowed (by law) to pay "discount fees" which are the processing fees the bank charges merchants for handling credit card slips. Since the banks won't handle these for free, you may well have to pay a surcharge for the privilege if your state lets you pay license fees by credit card. However, BHA says that there are no exceptions for retail merchants.


http://www.creditinfocenter.com/cards/crcd_buy.shtml#Question5

[Roon]

15. Thanks for the info eom

[Whoa_Nelly]

10. Tried to pay for bloodwork lab tests today with my debit card

The girl behind the counter looked dismayed. I asked if a check would be better.

She lit up, accepted the check, and refused my ID when I offered it.

So, the lab now has a check from me when they could have had a direct payment from my checking account right then.

Go figure! :silly:

[democracyindanger]

14. There actually was a big deal

a couple years ago between retailers and Visa because of the fees Visa charged the retailers. Don't know all the ins and outs, but retailers take a hit when you use a card. Amex fees run even higher, which is why not all stores accept them.

[kick-ass-bob]

16. Mastercard or Visa will revoke their priveleges if they find out.

I assume you are using one with one of those logos? In their merchant agreement it is strictly forbidden to add a surcharge just for using a credit card.

[jane_pippin]

17. I used to work in a place that did that. Here's how they got away with it:

If you used cash or check you got a "discounted" price.

If you used a card of any kind that had to go through the Visa/Mastercard thing, then you'd get charged "regular" price. "Regular" price was the "discounted" price plus the 4% or whatever it was Visa/Mastercard charged the store to have the machine there in the first place.

I don't know if it's legal, but it's definitely a lame move, in my opinion. When I worked there debit cards had just started getting popular too, so customers would try to argue the policy all the time.
"But, it's a checkcard! I should get the check price!"

"I know. I can't do anything about it, but I hear you."

I don't miss working there at all.

[cfield]

18. It's not that they're charging more for the item

rather they're charging you a fee for using your card. (Huh???)

Most businesses that have a credit/debit card machine for the customers to use, pay not only for the machine but also per card that runs through that machine. Some charge more for Discover or American Express because their cc machine company may charge them more for those specific cards.

When John's Company is set up with the machine, they pay a fee for each card transaction. So, if John's Company wants to charge *you* a fee for letting you swipe your card, it's perfectly legal; as long as that fee is disclosed to you.

Actually, there are some banks that will charge customers per purchase on their card.