Shoppers beware: swiping credit card could cost you more money
Shoppers beware: if you choose to swipe your credit card, it could cost you more money. Two major credit card companies are now allowing businesses to charge an additional fee on-top of your purchase price. It's being called a swipe fee or checkout fee.
News 5 talked with a local business and found out, they are still undecided about whether these changes could help or hurt business.
When you pay with plastic, stores pay as well. In fact, at Simply Delicious in Bristol, Tennessee each swipe of a credit card costs the business about 10-cents. "I would say about 60% of the total gross sales are credit cards," said owner Larry Slipek.
But things could be changing because of a settlement in an anti-trust suit by retailers. Stores that accept Visa or Mastercard credit cards are now allowed to add between 1-3% on top of the purchase price. It essentially helps pay for the cost of processing the transaction. However, this surcharge does not apply to debit cards.
Slipek says while 1-3% doesn't sound like much, it could help his bottom-line, "If you elect to put that service charge on the credit cards, it'll help you. You'll be able to recoup some of the losses. Let's face it maybe you can hire somebody else with that money or lower your prices."
But there are concerns the fees could upset customers and some might not be willing to pay. "When a customer comes in we've got a 9.25% tax, that's almost 10% of their bill and then you're going to add another 3% on," added Slipek.
Some customers say a change that small will be hard to notice. "It would be different if it was 20%. But, I don't think it will make me not use my credit card," said customer Diana Mattison.
While others, like Rufus Morison, are left asking one big question, "Why should I be paying the cost of someone's business?"
Here are some more facts on credit card surcharges: It is outlawed in 10 states California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.
Depending on the type of credit card, surcharges can be higher.
We've learned these changes are preliminary, the final decision by the court should be made later this year.
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