Effective January 13, 2018 surcharges (“Checkout Fee”) on credit and debit card transactions in the European Union are prohibited.
In the United States, confusion about checkout fees still lingers; here are some facts you should know:
1. The surcharge only applies to credit cards; it does not apply to debit cards (Advantage Checkcards for example) or prepaid cards (gift cards for example).
2. Cardholders who use a debit card or prepaid card at checkout and choose the “Credit” button in order to make a “signature” purchase should not be charged the checkout fee. If a store attempts to add a surcharge on a purchase made with an Advantage Checkcard, cardholders should inform the clerk they are using a Debit Card and not a Credit Card and the surcharge is not allowed.
3. The Checkout Fee may not exceed four percent (4%) of the transaction amount and merchants must disclose the actual dollar amount of the surcharge on the receipt. For credit card returns, a prorated share of the surcharge should be refunded as well.
4. Merchants who implement the Checkout Fee are required to post a notice at the point of store entry and at the point sale. Online merchants must post a notice in the first web page that references credit card brands. The disclosure must include the amount of the surcharge and the fact that the fee is being charged by the merchant, not the card issuer.
5. Some merchants will charge a “convenience fee” to the cardholder for using a card for their purchase, for example, taking online payments for rent rather than accepting checks only.
6. Merchants are allowed to require minimum purchases for credit card purchases — up to $10.
7. Merchant are allowed to offer discounts for cash, checks, or other non-credit card means of payment.
8. Several states have laws restricting surcharging; if you suspect a violation in these states, contact the state attorney general’s office.
9. Cardholders may report merchants charging excessive Checkout fees, or surcharging debit or prepaid card transactions, or setting minimum debit purchase requirements by going to this website and filling out the “Report a Merchant Violation” form: www.visa.com/checkoutfees.
10. For FAQs and information about credit cards and debit cards visit www.knowyourcard.org.
If you have any questions, contact Karen Bos-Carey with The Advantage Network at (605) 335-2937.