As a result of the $7.2 billion settlement between Visa, MasterCard, banks and merchants that authorizes retailers to charge a “checkout fee,” consumers paying with a credit card will see a new fee at the register.
Both Visa and MasterCard previously prohibited merchants from charging extra fees to consumers paying with plastic. As part of the settlement, however, the card companies announced that they would change their rules to allow merchants to charge the new fee, which retailers contend would help recoup revenue lost to card processing fees, GoBankingRates.com reports.
Due to differences in state laws, only customers in 40 states that allow surcharging will be subject to the new credit card fee, which must apply equally to all card brands. States that prohibit surcharging include California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
Merchants will be required to post notice of the fee at the point of entry, time of purchase and on the receipt, and retailers who decide to charge the fee are authorized to charge up to the equivalent credit card processing fee absorbed by the merchant, which could range between 1.4 to four percent, according to GoBankingRates.com.
While merchant trade groups maintain that most retailers will choose not to charge the fees for fear of customer backlash, some consumer advocates warned consumers to be on the lookout the new fee, which is set to go into effect Jan. 27.
“We’re not sure whether retailers are going to charge these fees,” Ruth Susswein, the deputy director of national priorities at Consumer Action, said, according to ABC 2 News. “They may not for competitive reasons. Some of it will depend on whether the other guy does it.”