As reports of merchants imposing surcharges on credit card transactions continues to rise, credit card users remain frustrated by these fees. Many feel they’re being nickel-and-dimed when asked to pay extra for credit card processing.
These findings come from WalletHub’s Credit Card Processing Fees Survey, which reveal that many consumers have been charged a fee for using their credit cards, and they aren’t happy about it. In fact, two-thirds of respondents said they would avoid using their credit cards altogether if they were subjected to such fees.
A New World of Surcharges
Charging extra for credit card transactions is a fairly recent practice. Surcharging for credit card usage was generally illegal until a class-action lawsuit in 2013 permitted merchants in several states to implement surcharges in their businesses.
Surcharging is now legal in all but four states. In 2021, Colorado repealed its ban on surcharges to better align with national regulations. At the same time, Kansas legislature considered but rejected a ban on surcharges.
Some states are pushing back on this. Last year, New York passed a law that required merchants to fully disclose their credit card surcharges or eliminate those fees altogether. The Durbin amendment to the Dodd-Frank law made surcharge fees on debit cards illegal.
Consumers Voice Discontent
The WalletHub survey suggests that customers want more legislation in this area. More than 60% of respondents stated that it was unfair for merchants to pass payment processing fees onto their customers.
A similar majority also felt that merchants were not transparent enough about the fees they charge for credit card usage. At the very least, merchants should be upfront about these additional costs.
“From what I’ve encountered a merchant may not even have a proper sign posted that they impose a surcharge on credit cards,” said Ben Danner, Senior Analyst of Credit and Commercial at Javelin Strategy & Research. “Or the sign is posted in a place away from the point of sale. It’s fairly obvious that when a consumer reaches the point of sale, they are not going to want to pay an extra fee just for using a card product.”
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