Can stores charge a fee for using a credit or debit card?

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Q. I recently went to get some food that my wife had ordered from a take out restaurant. I paid cash, but saw the restaurant had a sign that said a 4% surcharge would be added when paying by credit or debit card. I thought it was illegal. Is it?

– Buyer

A. It is not uncommon to see signs indicating surcharges or minimums if you wish to pay by credit card.

It is indeed legal.

Business owners have to pay credit card processing fees, said Lisa McKnight, certified financial planner at Peapack Private Wealth Management in New Providence.

The fees can vary depending on the type of credit card used and the payment processing system used, she said.

“Credit card processing fees have become more and more expensive, especially for small businesses which may have tight budgets and not generate as much revenue as their larger competitors, ”she said. “These costs can add up for a business, especially as the United States increasingly moves towards a cashless society.”

A class action in 2013 against Visa and MasterCard resulted in a regulation that allows businesses to pass some of the fees on to customers in the form of a credit card supplement, McKnight said.

“So that there are no surprises, companies that choose to add supplements are required to follow protocols to ensure full transparency,” she said.

For example, under Visa and Mastercard, businesses are required to register the surcharge with the payment network. Then, they must post a surcharge notice at the point of sale, both in-store and online. The consumer receipt must also state that an additional charge was added to the bill, McKnight said.

“In addition, it is perfectly legal for the company to offer a discount to a customer if they choose to pay with cash rather than with a credit card, ”she said. “The obvious reason is that cash is much easier to process compared to credit cards and there is no middleman to pay. “

Email your questions to [email protected].

Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.



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