Consumers should check their receipts closely for “checkout fees”
Merchants can start charging 4 percent surcharge on credit card purchases begining Jan. 27
Spokane Teachers Credit Union is reminding consumers that starting Jan. 27 they may start seeing signs in some of the places they shop, notifying them that a surcharge of up to 4 percent is being added to purchases made with any credit card.
It remains to be seen, though, how many stores, restaurants and other vendors actually will start imposing surcharges, which are commonly called “checkout fees.” News outlets such as Forbes and Consumer Reports have reported that merchants fear backlash. For instance, Dow Jones Business News reported that Target and Rite Aid will not charge the fees.
The change allowing the fees was part of a settlement approved by a U.S. District Court judge in New York after seven years of negotiation. It stems from a class-action lawsuit brought by retailers against several credit card companies and major banks, which previously had prohibited checkout fees.
STCU, other credit unions and community banks were not party to the lawsuit or involved in the settlement. According to a news release, the Spokane credit union does not benefit in any way from checkout fees.
The settlement places several requirements on retailers who choose to charge the fees. For instance, consumers will see signs at store entrances and near the cash register if a retailer imposes a surcharge. Those signs must disclose the percentage of the surcharge.
Online vendors must post the information on homepages. And the amount charged for each sale must be reported on the customer’s receipt.
The retailer can’t charge more than what it actually costs to accept a credit card. Under no circumstances can the surcharge exceed 4 percent of the purchase price.
The fees can’t be levied in 10 states where they’re specifically prohibited by state law. Those states are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Such laws do not exist in any Northwest states.
Fees do not apply to debit card purchases.