Retailers now able to charge up to four percent “checkout fee” for credit card purchases

320px-Cash_RegistersMerchants were recently allowed to charge a “checkout fee” to consumers who pay using a credit card that could add up to between 1.5 percent and four percent of the total purchase.

Merchants have historically been prohibited from surcharging customers who pay with credit cards, but in November, a federal judge approved a settlement between Visa, MasterCard, banks and retailers that eliminates the ban on surcharges. Effective January 27, retailers are now allowed to charge the “checkout fee,” reports.

Though most industry expects do not expect immediate widespread adoption of the new credit card fees, consumer advocates have voiced concern that the charges will become the standard.

“This outrageous, new fee should make every shopper think twice before plunking down a credit card,” founder Edgar Dworsky said, according to “If a national sales tax of two, three or four percent were being proposed, everyone would be up in arms. Yet, nearly the equivalent of that—an up to four percent credit card surcharge pushed for by retailers—has flown under the radar with seemingly little scrutiny, criticism or concern for consumers’ pocketbooks.”

Under the new rules, retailers can only charge customers for the actual costs of processing the credit card transactions, usually between 1.5 percent and three percent, or four percent, whichever is less. The rules allow retailers to choose the cards to which a surcharge can be applied.

Retailers will be required to post a notice of the new fee at the point of entry, though a disclosure of the exact fee percentage does not have to be provided until the point of sale. Receipts must also have a line item detailing the surcharge, reports.

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