I read an article that stated that merchants may legally charge a credit card surcharge starting tomorrow, but the article said that TX was one of the 10 states that still prohibited it. Last time I went to Shipley's, they had a sign that said there was a fee for using a credit card. Can they legally do that? Just curious.

I haven't been in Shipleys for quite a while. But I recall the sign they used to have posted said that there was a minimum amount that you could charge to a credit card.

If Fed law says they can charge a fee, and State law says they can't, it should get interesting if a challenge comes up.

Many merchant agreements prohibit it anyway. (That being the entity that processes the CC transactions)

The way that many merchants get around adding a fee is to simply offer "cash discounts" instead.

It became legal in 2010 under "Dodd-Frank" to impose purchase minimums of up to $10 as long as all credit cards were treated equally by that merchant.

Additionally, government and certain agencies e.g.- the County Tax Office - can impose a fee to recover the cost of processing cards.

[This message has been edited by OnlyANobody (edited 1/26/2013 10:15a).]

That's right, it did says something about a minimum amount to get charged.


Thanks for the response.

I saw the article as well. I contacted my credit union about it because I have had two local business place a surcharge on my card - La Familia and Kamei. I was told that merchants may not charge a surcharge in Texas. If they do, they should be reported to the Attorney General's Office https://www.oag.state.tx.us/consumer/complain.shtml

However, they can have a minimum amount that can be charged.

Shipley's isn't charging, their processor is. AND, the processor is charging the transaction fee to the customer for debit cards, not credit cards, that's the difference.

[This message has been edited by australopithecus robustus (edited 1/26/2013 10:51a).]

[This message has been edited by australopithecus robustus (edited 1/26/2013 10:53a).]

I have a debit card with my credit union. I was told by the credit union that surcharges cannot be added, regardless of how the card is processed (as debit or pressing the "credit button")

It's not a surcharge. It's the processing fee directly from the processor. The merchant isn't getting that $.

The processor is charging for the convenience of being able to use a debit card.

Seems fair to me.

Thanks. I only use my debit card as 'credit' (no PIN entry) and have had the two restaurants add a 'surcharge' to my receipt. It is itemized on the receipt as a surcharge and is in violation of the Texas Finance Code.

When there is a debit transaction fee at Shipley's, how is it disclosed on the reciept?

My recollection is that it said "debit service charge" or something like that.

I've had two eateries (blue baker and garpez) charge for using a debit card even though the card could be run as credit.

Blue baker employee said that they didn't have an option to run it as a credit card-the machine makes the decision for them. Seems to me if the card could be run as a credit, they should allow it instead of sticking the customer with a surcharge. Haven't been back since they started that, so this may have changed.

Didn't get a chance to ask the garpez employee as they were really busy, but I'm thinking the answer would have been the same. Included them in my post for reference on who charges the fee.

Again, the merchant IS NOT charging a surcharge, the processor is charging a processing fee for the convenience of using a debit card.

I'm not taking sides here, just offering clarity.

[This message has been edited by australopithecus robustus (edited 1/26/2013 12:23p).]

Ate at La Bodega last week and was told there would be a 3% charge unless paying by cash.

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Ate at La Bodega last week and was told there would be a 3% charge unless paying by cash.

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Please file a complaint. If enough folks do this, the merchants will be forced to stop.

Or yall could pay with cash and avoid all this

My guess is, if they are eventually told to stop doing it, then they will probably just raise the prices of everything on the menu by $.20-.30 that way the 3% is just already figured in everything, and then the cash paying people will just be screwed on top of it all.

For example, a place like La Bodega, if they were to raise their prices by $.20-.30 for each menu item, I seriously doubt those of you that frequent there will stop going. Now this would be if they gave no reason for raising their prices. But, on the flip side, if they come out and say prices were raised because 'we now have to add in the 3% fee to cover all of options dealing with credit/debit cards', then there will be plenty of people not go just out of spite and because they don't agree with it

I just called La Bodega. They don't do 3% added. There is a flat fee of 69 cents on debit cards only, not credit cards, and it is charged by the card processing company, not la bodega.

This is consistent with the analysis in my previous posts.

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if they are eventually told to stop doing it, then they will probably just raise the prices of everything on the menu by $.20-.30 that way the 3% is just already figured in everything

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Why raise their prices when their prices would already be compensating for this? It's not like the business is going to drop their prices 3-4% across the board, then charge a fee for credit card users only.

I just thought of something. We're talking about 69 cents! It costs triple that to get cash out of an atm.

I wouldn't personally complain about this, but I can see how a minority of people would be resistant to the evolution of things.

If charging 0.69 is allowed for using your debit card, are they still charging it if your card is used as 'credit' (no PIN entered?

[This message has been edited by MiMi (edited 1/26/2013 2:20p).]

As I understand it, and as said about blue baker earlier, the machine determines the designation of the card and the staff is unable to control that.

All other cards, amex etc., are not charged as debit and the fees are paid by the merchant.

rhoswen- sorry, that's what I meant. Now that there is a law stating they can charge this, places will take advantage of it in top of their prices already instead of just leaving things alone since it is already figured into their prices.

Ideally they should reduce their prices by 4%, and just charge those who use CCs, but of course they won't. So instead, they already have had this figured in and now you will see some places charging the 4% on top because it now says they can (even though they have already been compensating for it this whole time).

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just thought of something. We're talking about 69 cents! It costs triple that to get cash out of an atm.

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Doesn't this obviously depend on which ATM you use? Because I have plenty around town that I can get cash out of and there is no charge to me. But obviously if I am at the counter about to pay for some thing and have to scoot over to a private ATM because that is my only choice, then I'm sure there is at least a $2 fee.

I see this a little differently. I see this as places being able to price more fairly because those who chose to use the convenience of a debit card are paying their own way, instead of the cost of that convenience being spread across the entire customer base.

I'm biased, of course. I don't have a debit card and 90% of the time I pay with cash, so this doesn't affect me.

I question whether the machine can tell you to use your card as debit instead of credit. Sounds fishy to me. I haven't had this happen to me (yet). I only had a surcharge when using it as credit.

I would like to see stats on percentages of who uses a cc/dc vs cash, among say, fast food places, casual restaurants, convenience stores, etc.

80% of our transactions are CC/Debit..
Every $1.89 soda costs me $.19 to process.

We dont charge back the debit card fees to the consumer, which IS legal, but I understand why some places do.

If there was not a sign at the door or stated on the menu that there is an additional charge for the use of cards, I would refuse to pay it.

obviously australopithecus robustus feels strongly about this issue

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so this doesn't affect me.

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yet you have 8 posts about it on this thread

[This message has been edited by AGnCS (edited 1/26/2013 4:17p).]

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We dont charge back the debit card fees to the consumer, which IS legal, but I understand why some places do.

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So it is the merchant's decision as to whether or not the processing company can charge the fee? From the previous posts, it sounded like the merchant had no say if it was charged or not.

Yes ma'am. The merchants choice(to charge the customer), but only debit fees.

Im not sure of the exact verbiage, but Blue Baker has a very well written statement to the consumer.

[This message has been edited by charliemac (edited 1/26/2013 4:52p).]

Hey folks, this is straight from the guy in charge of these companies choosing to pass on the "service fee". I own the company here in town that is offering this service, it is No Cost Debit of Texas. Here is the LEGAL and ETHICAL reason behind this decision.
In Texas, it is legal to pass on a "service fee" not a surcharge, on debit cards only,as long as there are some things in place. I will not discuss these in public as our competition can spend their time finding this out like we did.
We have an opinion letter signed off by the Texas Attorney General Gregg Abbott that outlines this program as being legal in Texas.All merchants that are utilizing this program have a copy on site for consumers that think it is not legal.
The reason for it folks is because of a price increase to the merchants a little over a year ago. For places with a $15 ticket, the cost more than tripled. It went from costing about .10 cents to an average of .45 cents. Many of the businesses we have helped with this program are paying as much for processing fees as they are paying for rent. It is unbelievably costly. All of these places have chosen to implement this program instead of going up on their prices.
Those folks that pay with cash or by credit card are helping the restaurant out by eliminating burdening costs.
As we get feedback from merchants about the consumers reactions, we are finding that most do not realize the restaurant has to pay a fee to accept their debit card. Once they do realize this and realize the service fee is collected by the processor and then the restaurant is not charged for the debit transaction, nearly all customers can understand that logic. If it makes a difference to you then pay with cash, because believe me these higher fees are definitely making it difficult to stay in business.
We are talking about the cost of a slice of cheese for a hamburger to you, but for many business owners it is the difference between staying in business or not making it. I would expect many if not most companies having this program in place within the next year. I would also expect banks to take advantage of this and offer to its customers to refund "service fees" as a benefit of being one of their customers. You can ultimately blame your bank that issued that debit card. It is their fees that merchants are having to pay. Get cash and use it.

It's the price you pay for owning a business. If u charge me not only will I no longer give you my business but everyone I know will do the same. Have good morals as a business owner or get out of my city state and country.

Great information CharlieB. However, instead of keeping cash on me, I'll just use a credit card instead of my debit card. Since the new surcharge that starts tomorrow is prohibited in Texas, it will not cost me more to use it.

Bcstalk,
What you said is good, except tell it to the banks, not the merchants