Your morning latte may be getting more expensive. No, the coffee
shop isn't raising their prices, but they may start charging you an
extra fee if you plan on paying with your
It's just the latest tactic allowed by retailers who don't
appreciate $1 purchases paid for with Visa and MasterCard. Back in
2010, Congress gave businesses its blessing to impose $10 minimums
for credit card transactions. Now, a class action lawsuit is going
a step further and saying merchants can pass along 'swipe fees' to
Everything you need to know about checkout fees
Swipe fees are the cost charged to retailers by credit card
companies. Depending on the transaction, card issuing banks have
been able to assess a 1.5-3 percent fee to merchants in exchange
for processing a credit payment.
Previously, retailers had to eat this cost. However, 19
businesses, including big names such as Kroger and Target, brought
a class-action lawsuit in 2005 against credit card companies and
issuing banks to force a change to swipe fee policies. Earlier in
2012, the courts came to a settlement that allows merchants to pass
along swipe fees to their customers in the form of checkout
Here's the skinny on the checkout fees that may debut this
- Checkout fees can only apply to transactions made with credit
cards and not debit cards.
- Retailers charging checkout fees must clearly disclose them
at the store entrance, at the point of sale and on receipts.
Online merchants must also clearly disclose the fees on their
- The fee cannot be more than the actual cost incurred by a
retailer to accept a credit card payment, typically between 1.5
and 3 percent of the purchase price.
Fortunately, if you are lucky enough to live in one of these
states, you don't have to worry about checkout fees: California,
Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New
York, Oklahoma and Texas.
What makes residents of these states special? Well, each state
has a law on the books prohibiting retailers from charging checkout
fees, and those laws apparently supersede the new court
Reach for the cash or stick with the credit
For the rest of us who live elsewhere in the country, we'll need
to decide if the convenience of credit cards will trump the cost of
Not all retailers will charge the fees which may make them easy
to avoid. In addition, perks from a good
cash back rewards card
could potentially offset the price of a checkout fee. And if you're
short on cash, even at 3 percent, the checkout fee for a $3 latte
would only be nine cents.
Of course, it's not just consumers grappling with how to proceed
with the fees.
indicate checkout fees won't likely be lurking around every corner
as retailers weigh whether the money they recoup is worth
potentially driving customers to their competitors. After all,
customers have plenty of choices when it comes to spending their
money. And for every McDonalds, there is usually a Burger King
located just down the road.
While checkout fees seem like one more way consumers are being
nickel and dimed by businesses and banks, don't assume you are
helpless. Remember you can always try to negotiate down the fee,
which may be more effective for large purchases. And if that fails,
let your feet do the talking as you take your credit card - and
business - to another store.