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| xJason.Rogersx on flickr.com |
The issue revolves around what's called an interchange fee. Typically card companies charge retailers an average of two-percent per transaction. Grab a quick meal at Denny's for $20? Charge it on your credit card, and the restaurant pays the card processor 40 cents. Multiply this by the millions of transactions that consumers run on credit cards and you'll see somebody's making big money.
The retailers filed a suit against the card processing companies, charging that the card processors were artificially inflating the interchange fee. When the dust settled, the banks agreed to pay back $6 billion, temporarily reduce the interchange fee, and allow retailers to "stick" the consumer with the fee. Previously, two of the giants, VISA and Mastercard, would not allow merchants to 'pass along' those fees.
If the settlement is approved this doesn't automatically assure that you'll be seeing the fee added to your purchase price. Ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas) prohibit the passing along of so-called "swipe fees" to consumers. Some retailers fear the negative feedback from consumers and will simply "pass" on passing on the fees. Others may offer cash discounts, rather than infuriating credit card customers. And if you run your purchases on your debit card, the issue is moot--swipe fees won't apply to these purchases as far as the consumer sees them.
If some merchants decide to do the big pass-along, things could look a bit different. For RVers who are accustomed to pumping 100 gallons of fuel into their motorhome, and additional $8.00 on top of the fuel price could be a bit of a sting. It could be a while before we know the extent of damages. The matter may not clear the court system until the end of 2012.
1 comment:
Although we have more than one credit card we mostly use the one offered by Good Sam Visa. This card gains points we use to purchase gasoline cash cards for our RV travel. If we have to pay for "swipe fees", those fees will cost us more than we gain in points and we will switch back to using cash or debit card for all of our purchases. The big looser in this case will be the credit card companies. The current federal administration gave us protection from outragious fees/charges/interates rates and unanounced chages now the retailers finally get much deserved help also.
Norm
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