Economic Service Fee?? For using a credit card

[biosurfer1]

I took the little lady out to Dairy Queen tonight and it seems that the "cash discount" gas stations are using around here is spreading to retail.

I bought two Blizzards (got one free because of coupon) so the total should have been $3.89 +$.29 tax but the total flashed $4.74. The guy had asked if it would be cash or card so that should have told me something, but a lot of places ask that because it gets the system ready for a credit card.

Anyways there was a $.56 charge on the receipt that said "ESF" so I asked the manager what that was and he said it "was an Economic Service Fee and if I used cash I would get a discount" I use quotes because that is exactly what he said but charging a fee to use a credit is not giving a discount for using cash, it's charging a fee to use the card. A discount would be if they charged less than the posted price for whatever I bought. There is nothing posted anywhere about this fee nor did the cashier mention it when he asked if I was using a credit card or cash. I saved my breath because the 18 year old manager wouldn't have understood anyways.

Isn't it against the merchant agreement with Visa, etc to not charge a fee to use the card? I have already sent a message to Visa because if they are going to allow merchants to charge people more who use their card, there is no reason to have the credit card.

[Tobra]

I pay a fee for people to pay with a CC at the office. I don't recall whether or not it says anything about passing this fee along in the contract.

[Neilk]

I think a recent class action settlement against Visa or MC stated that merchants could now offer cash discounts or charge CC fees.

[Evans, Marv]

I was under the impression it was in the contracts merchants had with the credit card companies that they wouldn't charge a fee. I know some local businesses that have done that for a long time though.

[wdfifteen]

Neil nailed it. Since Jan 1 they are allowed to charge fees.

Checkout Fees | Visa USA

[biosurfer1]

Patrick...I'm in California and from that website I see:

“No retailer…may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means…”

Statute: Cal. Civ. Code § 1748.1(a) (West)

Discounts for Cash Payments are allowed in California

“A retailer may, however, offer discounts for the purpose of inducing payment by cash, check or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers.”

Statute: Cal. Civ. Code § 1748.1(a) (West)

I hate that they can charge a fee but simply say "oh, its not a fee, its a discount if you use cash" Shouldn't this "fee" be built into the cost of the item, THEN give a discount if you use cash?

[herr_oberst]

Time to start a movement. Pay cash for everything under say, 200 bucks. Make sure you count your change when they hand you the wad. Slow everything down. Gum up the works.

[widebody911]

Originally Posted by herr_oberst

Make sure you count your change when they hand you the wad.

This is one of my peeves - people who do not know how to count out change and just shove a wad of money back at you.

[motion]

You would be amazed at the transaction costs associated with a $3.89 credit card transaction. They are probably paying 15% in fees. I think its fine that anything under $10 must be paid in cash.

[A930Rocket]

Sounds like the "convenience fees" charged when you pay your bills by automatic bill pay using a debit card.

I make their life easier by automatic payment and I get charged more? What's so convenient about that? Makes me want to pay by check.

[biosurfer1]

I understand using credit cards costs the merchant money. It is against the rules to pass on this charge to the customer because the customer is already charged finance fees, annual fees, etc. If they have a problem with it, take it up with the credit card company or don't accept credit cards at all.

I don't understand why merchants will risk losing business by passing this fee onto customers then lie about what is really going on. There is NO discount by simply not charging a fee.

[sammyg2]

Zackly. It's agin' the law to charge extra for using a credit card in Ca.

A local pizza place recently started charging a fee for using a CC.
I explained that it was against the law and I wouldn't pay it.
He said I wouldn't get a pizza then.
i axed him iffn it would be worth it to lose a customer and get a fine from the state, and possibly a class action suit from all customers he's illegally charged?
He said here's yer pizza.

BTW, his prices were clearly posted so he couldn't get away with that phony discount stuff.

[stomachmonkey]

There are 40 states where this practice is now allowed.

CA, CO, CT, FL, KS, ME, MA, NY, OK and TX do not allow it.

Walmart has also gone on record saying that even in states where they can charge a fee they will not.

[john70t]

This demonstrates why "free" air/gas/cashback for card holders is not "free".
The banks charge the retailer for every CC transaction, and they pass that along to the all the consumers at the register.
Cash thus subsidizes the debt industry.
A percentage of billions in tranactions per day add up to serious gravy for the middlemen.

[biosurfer1]

Well I got a canned response back from Visa that merchants CAN charge a fee now to use credit cards. It was part of a years long settlement of a class action lawsuit.

I will keep one credit card for the convenience but I told Visa exactly why I was canceling the others and they asked if they could report that (I don't care) and the rep said they have had a lot of people complaining about it and are tracking that specific reason.

Simple fix, use cash or don't frequent the establishments that charge. The BS part is not being told of the charge and like Sammy, the prices were clearly stated and there wasn't a charge anywhere.

[stomachmonkey]

Originally Posted by biosurfer1

Well I got a canned response back from Visa that merchants CAN charge a fee now to use credit cards. It was part of a years long settlement of a class action lawsuit.

I will keep one credit card for the convenience but I told Visa exactly why I was canceling the others and they asked if they could report that (I don't care) and the rep said they have had a lot of people complaining about it and are tracking that specific reason.

Simple fix, use cash or don't frequent the establishments that charge. The BS part is not being told of the charge and like Sammy, the prices were clearly stated and there wasn't a charge anywhere.

Far as I know it's still not legal to do in CA.

Unless ya'll changed something since February.

[biosurfer1]

Here is the while email, if anyone cares:

Thank you for contacting Visa. We value your business and appreciate your writing to clarify merchant practices.



Visa has certain regulations that all merchants which accept Visa cards must follow. Visa merchants are not permitted to:



Minimum/Maximum – Debit

Visa merchants in the U.S. are not permitted to establish minimum or maximum transaction amounts on debit card transactions, even on sale items.



Minimum/Maximum – Credit

A new U.S. law (effective July 21, 2010) has gone into effect, which now allows retailers to establish a minimum purchase amount on credit card transactions. The minimum purchase amount must not exceed $10. This minimum purchase amount does not apply to transactions made with a debit card.



Visa merchants are not permitted to establish maximum transaction amounts on credit card transactions. However, some government agencies and institutions of higher education may establish a maximum purchase requirement on a credit card transaction.



Dishonored Check

Visa merchants in the U.S. are not permitted to submit a Visa sales draft for a dishonored check.



Check Out Fees (Surcharges)

Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a checkout fee on consumers when they use a credit card.

Historically, Visa has not permitted retailer surcharging, as we believe it penalizes consumers for using their preferred form of payment. However, allowing surcharging was a key provision required to settle long-standing litigation brought by a class of retailers in 2005.

For more information on merchant surcharges and states where surcharges are not allowed, click here Merchant Surcharging – Understanding Payment Card Changes .

A merchant may offer a discount for cash, check, and, effective July 21, 2010, debit, credit or prepaid. However, the cardholder must be made aware of this prior to entering into the transaction.



No Amount on Sales Draft

Visa merchants in the U.S. are not permitted to require a Visa cardholder to sign a sales draft that does not have a specific amount indicated.



Supplemental ID or Information

U.S. merchants may not refuse to honor a Visa card simply because the cardholder refuses a request for supplementary information or Identification.



Please notify the disputes area of the financial institution that issued your card of any merchant practices that you feel are inappropriate. Your card issuing bank has access to the appropriate Visa rules and regulations as well as to the Visa complaint forms, which should be used by your bank to document and file merchant complaints. It is not necessary for your bank to be the offending merchant's financial institution in order to file a complaint for you.



As an alternative, to report merchant practices that you feel are inappropriate, you may wish to contact the Visa Global Customer Care Services at 1-800-VISA-911 (1-800-847-2911) or go to our website at Credit Cards and Credit Card Offers | Visa USA. When calling, please advise the representative that you were referred to file a complaint. The staff will be able to initiate a complaint form over the phone.



We hope this information proves helpful and thank you for writing.

[daepp]

Originally Posted by sammyg2

Zackly. It's agin' the law to charge extra for using a credit card in Ca.

A local pizza place recently started charging a fee for using a CC.
I explained that it was against the law and I wouldn't pay it.
He said I wouldn't get a pizza then.
i axed him iffn it would be worth it to lose a customer and get a fine from the state, and possibly a class action suit from all customers he's illegally charged?
He said here's yer pizza.

BTW, his prices were clearly posted so he couldn't get away with that phony discount stuff.

But Sammy, gas stations here do it all the time.

[biosurfer1]

David, the difference with gas stations is once they post the two different prices, its hard to tell if they are actually giving a discount (they aren't) or are they charging more for using a credit card (bingo). They can simply say "the cash price is a discount"

With the pizza place, they have one price that everyone pays and then charge a fee if you use a credit card. No getting around that one. Technically, the pizza place could do the same and it would be hard to prove otherwise.

[wdfifteen]

Originally Posted by biosurfer1

Visa has certain regulations that all merchants which accept Visa cards must follow.

Those are VISA's rules which are trumped by state laws. The fee is illegal in California, so Californians can tell VISA to stuff it. Since VISA's change of policy is relatively recent, my guess is there is some confusion over whose rules prevail, and some California business think it's VISA's.