Retailers get power to add credit purchase surcharge

Jan. 29, 2013

This week, merchants in 40 states gain the ability to surcharge customers who use credit cards for purchases. The change is one measure in the proposed anti-trust settlement between U.S. retailers and the major card brands; it will take effect despite the fact that the settlement has not received final approval from a U.S. federal court judge.

Before implementing the surcharge, a merchant is required to notify the card brand(s) affected, said a report by CU Times. They must also notify consumers of the surcharge by posting notices of at the store entrance and checkout.

Retailers may add a surcharge equal to up to four percent of the transaction value. However, those in 10 states — California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas — will be banned from the practice by state laws, which supersede the settlement.

According to CU Times there is some doubt that retailers, especially the majors, will take advantage of their new surcharge power, given the highly competitive retail environment and the complication of the state bans, which could drive sales across state lines.

Additionally, final approval of the settlement remains to be determined, and with opposition coming from many of the retail industry's heavyweights, it is by no means assured.

Read more about transaction processing.

Topics: Transaction Processing

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