|Written by Cheri Perry|
|Monday, 23 July 2012 00:00|
For years, Visa & MasterCard prohibited the practice of surcharging: tacking on an additional fee when customers choose to pay with their credit card.
The recent 6 Billion Dollar Settlement has changed all of that. Merchants (in most states) can now assess a surcharge on their customers. The states that are still prohibited (due to State laws) are:
As a business owner, it is worth considering WHY Visa prohibited surcharging in the first place:
One of the core tenets of the consumer experience is that the stated price of an item — as advertised — is the actual price paid at checkout. This fundamental consumer protection has been recognized by governing bodies around the world. Visa supports retailers’ choices to offer discounts to consumers who pay with cash or use their debit card with a personal identification number. Retailers can also shop around among competing financial institutions for the best card acceptance prices offered to them, or they can choose to accept only cash or checks. Retailers can implement all sorts of “steering” strategies, such as asking the consumer to pay with a different form of payment. Visa supports all of these options as effective ways for retailers to manage their costs while also protecting the consumer.
Credit card processing fees are a large expense for business owners, so it is no surprise that the ability to surcharge on credit card transactions is being viewed as a WIN by many retailers. We would advise business owners to use caution if they decide to exercise their new surcharging rights! Consider these guidelines:
If the goal is to gain repeat and referral customers AND to make a profit, business owners will need to proceed with caution so they can do both without irritating their existing and future customer base.