this article may help shed some light for those who are curious about the debit fees.
http://www.nerdwallet.com/blog/banking/durbin-amendment-explained/

Paying with cash.

quote:

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If you won't visit businesses that pass along costs to their customers, then you won't be visiting many businesses. Do you not understand how businesses work? Do you think businesses exist to provide things for consumers?

[This message has been edited by Unmade bed (edited 1/27/2013 1:54a).]

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I guess the way I worded that was confusing. I mean, I won't be visiting businesses who think it's a good idea to add this service fee for using debit cards.

Visa's statement on "surcharges" :

http://usa.visa.com/personal/using_visa/checkout_fees/index.html

Texas AG statement on CC fees:

https://www.oag.state.tx.us/consumer/credit_cards.shtml#extra

How bout a lil' double standard for ya:

Democrat Senator Di Fi of California wants to ban 157 weapons...but the govment can use 'em.

Texas bans CC surcharges, unless I buy my vehicle registration on-line, where I pay a $2 credit card fee!

It's good to be the King!

quote:

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Texas bans CC surcharges, unless I buy my vehicle registration on-line, where I pay a $2 credit card fee!

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The Gov't agency has no way to recoup the swipe cost like a business can (ie. increasing prices).

It's always been my understanding that debit card transactions cost the merchant less than credit card transactions. I have never had any place charge me extra for using a debit card instead of a credit card.

I think someone is giving CharlieB some misinformation. There are federal and state laws involved. Federal law permits credit card service fees/surcharges as of 1/27/13 and prohibits debit and gift card service fees/surcharges. This was reported on national news last week regarding the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (MDL 1720).

The link below explains the laws and allows customers to file an inquiry regarding an offending business. The questions are; will the laws be enforced and by whom?

http://usa.visa.com/download/merchants/acquirer-communication-to-merchants.pdf

P.S. Processors don't set the fees (called interchange) the Bankcard Associations do. Processors and Agents add a margin to cover their costs and make a profit. Check it out on Wikipedia, http://en.wikipedia.org/wiki/Merchant_account

CCBurton- blue star for you.


[This message has been edited by gigemwhoop88 (edited 1/29/2013 7:15p).]

Ccburton,

Maybe I'm missing it, but I see nothing in the link you provided that would substantiate your statement. Do you mind highlighting if you can find it?

The rules in Texas do not allow for surcharges on credit or debit cards. All merchants participating in our program are utilizing a "Card Payment Discount Program" which is outlined by the Texas Attorney General as being legal within the guidelines these merchants are participating. THEY ARE NOT DOING A SURCHARGE. They do not claim to surcharge, nor are they doing a surcharge. There is a link of the Attorney General opinion letter in this thread. Please refer to that for a better understanding for the legality in Texas. As far as federal law goes, the Durbin amendment to the Federal Financial Reform Act no longer will allow for debit cards to be distinguished between pin base and non pin base ( signature base)and the merchant has the right to choose which debit network they want to use. It has always been legal to pass on a "service fee" on debit transactions but it used to be a " pin pad and pin # were required. We have a patent pending software program that will now allow the service fee to be allowed because of wording in the Durbin Amendment. One of the largest processors, Heartland Payment Systems, when they learned of this program 8 months ago tried for a week to get a federal injunction to stop it. Through their internal compliance department they realized that this program the way we operate it, is completely legal. It has been in place with area merchants for going on 9 months now. The only reason there is chatter about it now is because of the recent rules change by Visa and Master card which has nothing to do with our program. I hope this clears up any misunderstandings.

Headhurt.

robustus,
Here is a quote from the link I provided, "Retailers are permitted to apply a surcharge to only credit card purchases and cannot impose a surcharge for purchases made using a debit or prepaid card." Whether the added cost to the customer is called a service fee or a surcharge it is not permited on a debit or gift card.

CharlieB,
The game changed 1/27/13 with MBL 1720 which is the settlement of a suit filed by retailers unsatisfied with the way the Durbin Amendment was being administered. The Texas AG opinions you refer to were all prior to 1/27/13. In fact the retailers are not happy with the settlement either. They attempted to stop 1720 going into effect on 1/27/13, the judge denied their request.

You are half correct that the fees for debit transactions using a pin number or signature are the same. But the Durbin Amendment only applies to large banks. Smaller debit card issuing financial enties such as local independent banks and credit unions are not subject to the Durbin Amendment. There is bound to be more litigation both on the Federal and State levels. So my questions remain. Will the current laws be enforced and by whom? Or will blind eyes be turned to the current laws while the disputes continue through the courts. The Durbin Amendment's purpose was to reduce processing fees to businesses. It did for sales on debit card sales of over $10. The large banks are predicted to see an annual revenue loss of 5 billon dollars. But it increased fees for sales under $10. That is why Redbox rentals went from $1.00 to $1.20. This isn't the first time government regulations have created unintended consequences. One of the arguments used by the the retailers to support the origianl Durbin Amendment was that they would pass the credit card fee savings on to customers. It is most likely that more businesses will experiment with the service fees/surcharges as more processors permit the use of these fees. The final verdict is in the hands of the customers who vote with their dollars.

P.S. Here is a link to a summary of MBL 1720, http://usa.visa.com/download/merchants/acquirer-communication-to-merchants.pdf

[This message has been edited by ccburton (edited 1/30/2013 11:34a).]

Latest NBC news article on service fees/surcharging, http://www.nbcnews.com/business/attention-shoppers-another-credit-card-fee-here-1C8086499

[This message has been edited by ccburton (edited 1/30/2013 6:17p).]

Wow. I'm amazed at the backwards thinking.

The merchant is not passing a cost onto you. It is the exact opposite. You are attempting to pass a cost onto the merchant. But you are failing, because the money all comes from the customer in the first place. Prices are all 1-3% higher because everyone uses plastic. You are paying the fee today, it is just hidden, and you have no control over it. The change gives you the choice of whether to pay the fee or not. It gives you control, where previously you had none.

In fact, now that I've thought about it, I'm going to take it to the next level. From now on, fee or not, local businesses get cash from me. I'm going to give them a de facto 3% advantage over the competition.

Shop Local, Pay Cash

Here is the real problem with this "debit card" fee and why everyone in our community should be outraged!

Like a few people have posted in this and the pervious thread, you go to one of these participating locations who have chosen to impose this new "debit card" fee... $0.69 on a $10.00 purchase, for example. That equates to 6.9%!!!!!

Even with the impact of the Durbin amendment that increased the fees Visa and MasterCard charge on small ticket purchases, the % the merchant pays is no where near 6.9%, but more like 3.5%-4.0% at the most.

So what's really happening is that this new company called No Cost Debit of Texas (aka Brazos Valley Merchant Services) is creating a "hyper-inflation" situation that directly impacts the consumer. NOT a good thing in a recessionary period and certainly not a favorable way for business owners competing for the consumer $$ to treat their customers.

My prediction is that the businesses who choose to allow this new processor to make a lot of money off of local consumers (and NOT just transferring the current processing costs dollar for dollar) will quickly find themselves losing customers and losing much more in revenues than they might save in debit card (checkcard) fees that these businesses have ALREADY taken into consideration when they set the prices for their products and/or services.

I personally don't see the businesses who have chosen to participate in this horrible business practice reducing the prices of their products and services in exchange for charging the customer MORE for paying with a check card! Hence, the hyper-inflation I spoke of earlier in this post!

An even bigger atrocity is the rumor circulating that some of these merchants have actually been able to negotiate a KICK BACK from this new processor in exchange for agreeing to participate in their new money-making scheme! I haven't heard this directly, but if this rumor has any merit whatsoever, then that would certainly add insult to injury!!

A very displeased Aggie Mom!!

Sorry...dj_aggie. Your math is all correct, and it is an atrocity TO GIVE 6.9% TO A BANK, but I'm not seeing why it is fair for the business to foot this cost instead of the person choosing to bring it into the equation.

Multiple blue stars for you, Stucco, if it were possible.