New merchant surcharges on credit purchases

Most of us have gotten used to charging purchases on a debit or credit card. Just swipe the card and avoid the hassle of carrying cash.


Look carefully. You may notice a new fee on your receipt. Retailers are now allowed to pass along to consumers the cost of processing credit cards.

It’s called “merchant surcharging” and it’s permitted in most states. You can be charged up to 4 percent on each transaction and, similar to sales taxes, merchant surcharging can be automatically added to your bill. After a while, these charges can add up, so consumers may want to reconsider how they pay for goods and services.

Why now? Well, merchants have long been charged a processing fee by the credit card companies when consumers chose to charge their purchases. Previously, the fee could not be passed along to customers.

However, as a result of litigation, merchants in the U.S. and its territories can now pass that fee along directly to customers using credit cards (but not debit or prepaid cards).

What can consumers do?

• Use cash for smaller purchases; some retailers may offer you a discount if you pay with cash

• Review sales receipts for unexpected fees

• Look for notices about merchant surcharges; retailers are required to let you know so you can decide beforehand if you want to pay with a credit card

• Use a debit card with “bricks and mortar” establishments you know and trust

• Use a credit card for online purchases when you need the greater protections that credit cards offer

• Get into the habit of monitoring your bank account and credit cards accounts online

Several states have banned merchant surcharges: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

In other states, it’s optional, and will vary from store to store.


Reach Kelvin Collins, the president/CEO of the Better Business Bureau of Central Georgia and the CSRA Inc., at (800) 763-4222 or