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Public Policy

Consumers being ‘warned’ about non-existent credit card surcharges

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Consumers have heard a lot lately about how retailers have supposedly begun imposing a surcharge for credit card use. What they probably haven’t seen, however, are any actual surcharges.

That’s because the surcharge scare that has erupted across the country is a propaganda campaign staged by the card industry in an attempt to divert attention from skyrocketing swipe fees that have tripled over the past decade. The truth is that few, if any, retailers plan to surcharge, and most couldn’t even if they wanted to.

“While there conceivably could be exceptions, merchants in general have no intention of surcharging,” NRF Senior Vice President and General Counsel Mallory Duncan said in a statement released by NRF. “We have discussed the settlement with many of our members and other merchants, and not a single one has said they will surcharge.”

Duncan appeared on Fox Business News to dispel claims that retailers have changed the way they treat credit cards. NRF is working with the state retail associations to help explain at the local level why retailers are unlikely to surcharge, and is helping them respond to legislation to ban surcharges being introduced by lawmakers in four states (Illinois, Pennsylvania, New Jersey and Vermont) who haven’t bothered to check the facts. Some state attorneys general offices and local consumer protection offices have even pledged to “protect” shoppers again the mythical surcharges.

The surcharge issue comes from the controversial proposed settlement of merchants’ lawsuit against Visa and MasterCard swipe fees that was announced last summer and is still being debated in court. The proposed settlement would remove Visa and MasterCard’s long-standing ban on surcharges. But rather than simply allowing surcharges, the new rules set out a complicated set of conditions under which retailers could theoretically surcharge – conditions NRF believes would keep most merchants from surcharging even if they wanted to. Retailers weren’t looking to surcharge, but the provision was put into the proposed settlement by card industry lawyers.

NRF has emphasized that retailers didn’t ask for surcharging, don’t want to surcharge, and – under the terms of the settlement, other Visa and MasterCard rules, and various state laws – most would not be able to surcharge.

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