Merchant Group: Retailers Unlikely to Introduce Credit Card Surcharging (Jan. 30, 2013)
Jan. 30, 2013
Merchants across the U.S. are holding off on introducing a surcharge for Visa and MasterCard credit card transactions despite getting the green light to do so this week under the terms of a proposed settlement in the merchants’ antitrust case reached last November. The settlement, subject to final approval in a hearing slated for Sept. 12, 2013, includes a $7.25 billion payout to merchants, though many have objected to its terms and challenged it. Although the case is still pending, merchants won the right to impose a surcharge on credit card transactions as of Jan. 27, 2013, but the National Retail Federation says it knows of no large or small retailers that plan to add fees.
One reason is that 10 states representing about 40 percent of all U.S. credit card transaction volume have laws barring credit card surcharging, which may cause operational headaches for national retailers, J. Craig Shearman, an NRF spokesperson, tells Paybefore. For small merchants, adding a card surcharge could “involve a lot of paperwork, new signage and point-of-sale changes that wouldn’t be worth it for them,” he adds. Surcharging also would be “the opposite of what merchants wanted out of the settlement, which was to reduce merchants’ and consumers’ costs from paying unfair interchange,” Shearman says.
Wal-Mart Stores Inc. is “not interested in surcharging customers in order to allow credit card companies to continue charging unfair fees,” Randy Hargrove, a Wal-Mart spokesperson, tells Paybefore, adding that the proposed modification to the no-surcharging rule for Visa and MasterCard “provides no benefit” to the retailer or its customers.
But Linda Sherry, a spokesperson in the Washington, D.C. office of consumer advocacy group Consumer Action says surcharging could still be a possibility for small merchants. “Credit cards, with higher interchange fees than debit cards, have been a problem all along for smaller merchants and some of them may welcome the opportunity to surcharge,” she tells Paybefore.