Adding Surcharges to Credit Card Purchases

[Guv Bob]

This is a result from my recent dealing with a plumber who tried to add a service charge for my paying by credit card. I didn't tell him that has been illegal in this state for as long as I can remember. But when I asked him to itemize that charge on the receipt, he decided not to add it.

In general, anyone who sells products or services is considered a retailer. This does not apply to governments and some organizations such as non-profit charities, etc.

Below are the states who currently prohibit this type of charge.

California Colorado Connecticut Florida Kansas Maine Massachusetts New York Oklahoma Texas

From

States Where No Surcharge Laws Protect Consumers

Surcharging isn't allowed everywhere. Currently, there are laws limiting surcharging in: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Consumers who are subjected to a surcharge or checkout fees in states where they may be prohibited from surcharging may want to report the retailer to their state attorney general's office. California ==================

"No retailer...may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means..."

Statute: Cal. Civ. Code § 1748.1(a) (West)

Discounts for Cash Payments are allowed in California

"A retailer may, however, offer discounts for the purpose of inducing payment by cash, check or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers."

Statute: Cal. Civ. Code § 1748.1(a) (West)

Statutes cover: Credit Cards only

Statute: (Cal. Civ. Code § 1747.02(a) (West) (defining "credit card"))

California State Attorney General Colorado ==================

"[N]o seller...may impose a surcharge on a holder who elects to use a credit or charge card in lieu of payment by cash check or similar means..."

Statute: Colo. Rev. Stat. Ann. § 5-2-212(1) (West)

Discounts for Cash Payments are allowed in Colorado

"Discounts offered to induce payment by cash, check or other means not involving credit card are not finance charges if offered to all prospective buyers and disclosed clearly and conspicuously in accordance with regulations."

Statute: Colo. Rev. Stat. Ann. § 5-2-212(2) (West)

Statutes cover: Credit Cards only

Statute: (See Colo. Rev. Stat. Ann. § 5-1-301(16), (16.5), (24), (43) (West)).1

Colorado State Attorney General Connecticut ==================

"No seller may impose a surcharge on a buyer who elects to use any method of payment, including, but not limited to, cash, check, credit card or electronic means..."

Statute: Conn. Gen. Stat. Ann. § 42-133ff(a) (West)

Statute: Id. at § 42-133ff(d).

Statute covers: Credit & Debit

No surcharges on travel agents

"No provider of travel services may impose a surcharge on or reduce the commission paid to a travel agent who acts as an agent for such provider if the buyer uses a credit card to purchase such provider's travel services."

Statute: Conn. Gen. Stat. Ann. § 42-133ff(e) (West)

Statute does not define credit card to include debit card

Connecticut State Attorney General Florida ==================

"A seller...may not impose a surcharge on the buyer...for electing to use a credit card in lieu of payment by cash, check, or similar means, if the seller...accepts payment by credit card..."

Statute: Fla. Stat. Ann. § 501.0117(1) (West)

Discounts for Cash Payments are allowed in Florida

Discounts offered to induce payment by cash, check or other means not involving a credit card allowed if offered to all prospective buyers.

Statute: Fla. Stat. Ann. § 501.0117(1) (West)

Statutes cover: Statute does not define credit card to include debit card

Statute: Fla. Stat. Ann. § 501.011(1) (West)

Florida State Attorney General " Kansas ==================

"No seller...or any credit card issuer may impose a surcharge on a card holder who elects to use a credit card in lieu of payment by cash, check or similar means."

Statute: Kan. Stat. Ann. § 16a-2-403

Discounts for Cash Payments are allowed in Kansas

Attorney General's opinion interprets section 16a-2-403's predecessor statute to not prohibit discounts for payments made by cash, check or similar means.

Statute: Kan. Op. Attorney Gen. 86-115, 1986 WL 238345 (1986)

Statutes cover: Statutes do not define credit card to include debit card

Statute: (See Kan. Stat. Ann. §§ 16a-1-301(18), (19))

Kansas State Attorney General Maine ==================

"No seller...may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means."

Statute: Maine Rev. Stat. Ann. tit. 9-A, § 8-303(2) (See also id. §

8-103 (definitions and rules of construction))

Discounts for Cash Payments are allowed in Maine

Discount offered to induce payment by cash, check or other means not involving a credit card not considered a finance charge if offered to all prospective buyers and disclosed clearly and conspicuously.

Statute: See Maine Rev. Stat. Ann. tit. 9-A, § 8-303(3)

Statutes cover: Credit cards only

Statute: (See Maine Rev. Stat. Ann. tit. 9-A, § 1-301(15), (16)).1

Maine State Attorney General Massachusetts ==================

"No seller...may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means."

Statute: Mass. Gen. Laws Ann. ch. 140D, § 28A(a)(2) (West)

Discounts for Cash Payments are allowed in Massachusetts

Discount offered to induce payment by cash, check or other means not involving a credit card not considered a finance charge if offered to all prospective buyers and disclosed clearly and conspicuously.

Statute: Mass. Gen. Laws Ann. ch. 140D, § 28A(b) (West)

Statutes cover: Credit cards only

Statute: (Mass. Gen. Laws Ann. ch. 140D, § 1 (West))

Massachusetts State Attorney General New York ==================

"No seller...may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means..."

Statute: N.Y. Gen. Bus. Law § 518 (McKinney)

Statute covers: Credit cards only

Statute: (N.Y. Gen. Bus. Law § 511(1))

New York State Attorney General Oklahoma ==================

"No seller...may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means."

Statute: Okla. Stat. Ann. tit. 14A, § 2-211, -417 (West)

Discounts for Cash Payments are allowed in Oklahoma

Discount offered to induce payment by cash, check or similar means not involving an open-end credit card not considered a credit service charge if offered to all prospective buyers clearly and conspicuously in accordance with regulations.

Statutes cover: Credit cards only

Statute: (See Okla. Stat. Ann. tit. 14A, § 1-301(7), (9), (19)

Oklahoma State Attorney General Texas ==================

"[A] seller may not impose a surcharge on a buyer who uses a credit card for an extension of credit instead of cash, a check or a similar means of payment."

Statute: Tex. Fin. Code Ann. § 339.001(a) (Vernon)

Statute covers: Credit cards only

Statute: Tex. Fin. Code Ann. § 301.002(a)(2),(9)

Texas State Attorney General

[dennisgauge]

How do gas stations in NY get away with charging 10 cents more per gallon for using a credit card?

All the "Valero" branded stations do this. Many Mobil stations are now doing it, and some Hess stations have also begun this practice.

Must be they can call it a "cash discount" and that's good enough for the law.

Frankly, it SHOULD be legal to impose a credit surcharge. It costs the merchant 3-5% of GROSS for the ability to accept credit cards.

Credit surcharge would also make people think twice about buying things they can't afford. Rather than have it now they save the cash, and maybe by the time they've saved up they will realize they never needed it in the first place.

Unfortunately that is bad for business in general.

[bill_activist]

Actually, the law recently changed on this.

Starting this year, retailers can now charge extra for using a credit card.

SBRE90R14U20130128

I think this is a good thing. Credit card companies charge the retailer, so that company should pass that charge on to people who use credit cards. Cr edit cards are not free.

[Nate Nagel]

Using a credit card gives the consumer some protections that you don't have with cash or debit card however.

nate

[trader4]

Yeah, I don't see why people have a problem with this. It's another example of big govt getting involved where they have no business being. If a gas station wants to charge 5 cents more for credit cards, why shouldn't they be allowed to? It's their business. They have to pay the credit card company an additional fee. If I'm willing to pay cash, why should I have to bear the cost of others who choose to use a credit card.

And every place I've been, where there are businesses that charge an extra fee, there have been plenty of others that you could chose to go to that don't. Around here, NJ, the only ones doing it that I've seen are gas stations. Plenty of them, most probably, don't charge extra.

[Ed Pawlowski]

I don't have a problem with charges. I want to pay cash and keep the money in my pocket. It you want to use a middle man service for your finances, you should pay for it.

Shoe store I buy from offers 5% discount for cash. Recently, I made purchases in excess of $1000 from two local merchants. I offered them my debit card or a check. They chose the check.

[=]

Around here, it's called consumer protection and we've fought long and hard for the laws that finally give the average consumer some way to avoid being screwed by merchants and companies who are only too happy to tack on fees just because. The airlines have become particularly good at such things.

You may live in a city where there is plenty of competition. That's fine; but a rural area or small town with a couple of gas stations is not a hot bed of competition -- especially if the owners talk to each other at the monthly C of C meetings. I don't want the government to do everything for me; but I do want a level playing field and a fighting chance to get a fair deal.

Tomsic

[dadiOH]

So how is it unfair to charge you more when you cost them more?

[Gordon Shumway]

Isn't that what the OP said?

[Stormin Mormon]

In the land of the free, and the home of the brave, why does the government regulate every aspect of our lives and finances?

[IGot2P]

(snipped)

We own a retail business in Iowa and we have a sign that states that we charge a 3% service charge for credit cards. It is amazing that once people see the sign money find another way to pay for it (usually a check). Of course there are some that would a 10% surcharge or more because they do everything on credit until it catches up with them.

Don

[trader4]

So, instead they raise the price of gas 5 cents, you happy now? Why should those paying cash help pay for the cost of your credit card usage? How is that fair? This is just another example of a dumb, feel good law.

Do you understand economics 101?

They had their "meeting". You pass a law saying they can't charge differently for credit card purchases, even though the use of a credit card adds to their cost for that purchase. So, they raised the price of gas for everyone 5 cents. If it were me, I'd raise it

10 cents, to more than make up for you screwing with our private businesses. Happy now? All you're doing is making everyone pay for the fact that YOU want to use a credit card. What's next? You want to cash customers to pay for the interest on your credit card too?

[krw]

Unless the debit card is processed through the credit card system (Visa or MC). If you use the PIN, any protection you may have is up to your bank.

Of course cash has certain protections that the others don't have, too. ;-)

[krw]

That's up to the seller. You have the choice of buying somewhere cheaper or not at all, of course. Note that there are advantages for the seller, too.

Did someone here have an issue with that? I know a restaurant that would rather take an out-of-state check than a credit card. Odd, but the owner said he'd never been stiffed so it was a good deal.

[krw]

Because they can.

[Larry W]

It is not government directly regulating in this case. Without lobbying by the credit card industry, those states would never have passed these so-called "consumer protection" laws. These laws benefit the card companies, in effect making cash customers subsidize the card companies and their card holders.

[Ed Pawlowski]

My debit card has every feature that a credit card has Extended warranty. price protection, dispute resolution, etc. It has the MC logo.

[Tony Hwang]

Hi, Up here there is no more surcharge on card use at retailers. Some did and some didn't in the past. I avoided ones who surcharged. In some cases cash is useless. Cash is not welcome. And also we abolished pennies in cash x-action. On credit card or debit, we count pennies yet.

After retiring from our professional career, we have been running health food stores to keep us busy. Now personal check almost extinct. Mostly they use debit cards and Visa, MC in that order. We don't accept Amex, the service charge is a killer. We pay all our suppliers with credit card. No one surcharges. We collect points.

[dpb]

That's a vendor feature then; it's not written into law and they can back out any time they choose by modifying the agreement. I've not seen that offered on debit. Often also they lock accounts for over the withdrawal amount on larger purchases to prevent a second relatively soon use from exceeding a daily limit. I've got one that's AC/DC but I never use the debit side -- there's no advantage at all and several disadvantages to me.

[krw]

Only if you use it as a credit card. In this case, MC backs it, since it's being cleared through their network. If you use it as an ATM card (enter the PIN), you lose those protections because it isn't being cleared through MC, rather your bank's (and their affiliates) ATM network(s).