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Big retailers to avoid new credit card surcharges

Walmart.com-Polaris-Search-Engine-Kosmix1Though retailers are now able to charge a “checkout fee” to consumers who pay with a credit card, many retailers may avoid charging the fees in the face of fierce competition and potential consumer backlash.

Macy’s, Wal-Mart, Sears and Target said that they do not plan to surcharge consumers, an option that became available as a result of a proposed lawsuit between Visa, MasterCard, retailers and some of America’s largest banks, TwinCities.com reports.

“The proposed modification to the no-surcharging rule for Visa and MasterCard provides no benefit to customers or merchants such as Walmart,” Randy Hargrove, a Wal-Mart spokesman, said, according to TwinCities.com.

Joe Ridout, a spokesman for the non-profit consumer advocacy group Consumer Action, said that small, independent retailers may be more willing to surcharge because they pay higher rates to banks to process credit card transactions and lack the bargaining capabilities of larger retailers.

“We fully expect most retailers won’t surcharge credit cards with the abundance of alternatives available to consumers,” Ridout said, TwinCities.com reports.

The settlement, which won preliminary approval late last year, marks the end of a seven-year battle over interchange fees in which merchants alleged that the card companies and banks colluded to fix interchange rates. Wal-Mart and Target have, however, have voiced concern about the lawsuit, saying that it would allow card companies to raise rates on merchants in the future.

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