Being charged to use your debit card

[SL6827]

When I got a script filled today I was charged an extra .52 to pay with my debit card. So annoying. Isn't that illegal? With my insurance the script was to be no more than $15.00, but I paid $15.52. Now I agreed to it but was annoyed at the same time. It is a mom and pop pharmacy so I guess the extra card fees do cut into their bottom line so from now on I will use cash or a check. But if everyone were to start to do this, and people started using checks more frequently, does that cost the bank more to process a paper check?

 

[ruadisneyfan2]

It's not illegal but most vendors are reluctant to charge a fee for fear it will deter customers. Here in NJ most gas stations charge 4-10 cents per gallon extra for people not paying cash. I agree that it's annoying but I'd rather pay a fee at a place I really like than to have them change their policy to cash only. Our favorite pizza shop is cash only and we never use cash; I don't even carry a debit card anymore, but I have to get cash because their pizza is so much better than any place around here so I find a way.
Speak with your wallet. If they lose enough business, they'll change their ways.

 

[SL6827]

It's not illegal but most vendors are reluctant to charge a fee for fear it will deter customers. Here in NJ most gas stations charge 4-10 cents per gallon extra for people not paying cash. I agree that it's annoying but I'd rather pay a fee at a place I really like than to have them change their policy to cash only. Our favorite pizza shop is cash only and we never use cash; I don't even carry a debit card anymore, but I have to get cash because their pizza is so much better than any place around here so I find a way.
Speak with your wallet. If they lose enough business, they'll change their ways.

I will just use cash or check with this particular business because I like them. But I really did think it was illegal. What I wonder about is what if places like Walmart, Target, Costco, big name stores start this?

 

[kaytieeldr]

Pretty sure it violates their agreement with Visa/MC. Ask your card issuer.

 

[ruadisneyfan2]

Pretty sure it violates their agreement with Visa/MC. Ask your card issuer.

http://www.ncsl.org/research/financ...credit-or-debit-card-surcharges-statutes.aspx

 

[ruadisneyfan2]

I will just use cash or check with this particular business because I like them. But I really did think it was illegal. What I wonder about is what if places like Walmart, Target, Costco, big name stores start this?

Would you still shop there if they did? Imagine if Disney started charging fees. Think how that would affect how customers feel about them. People would be angry at them. You could book, then later cancel, and your refund would be less than what was charged to your card.
Imagine if Amazon started doing this.

Just because they can, doesn't mean they should or would.

 

[Ellie008]

If you are using it as a debit card (you would have to enter your PIN) then the business is not being charged extra, and should not be passing on a fee. If you are using your debit card as a credit card (swiping and no PIN, same as a VISA), then that is different.

I have never seen a business charge extra for debit transactions. I have seen plenty of them either charge extra for credit card transactions, or get around the rule (they aren't supposed to charge extra) by having a discount if you pay cash. I tend to avoid those places as much as possible, but I understand why they do it.

 

[georgina]

I rarely use cash, never use debit, but sometimes at mom and pop type places I will use cash because I know they are paying a fee to accept credit. I have been to a few smaller places that take AmEx, but I will use a Visa instead because AmEx charges higher fees (I think that is still true?)

 

[tzolkin]

I rarely use cash, never use debit, but sometimes at mom and pop type places I will use cash because I know they are paying a fee to accept credit. I have been to a few smaller places that take AmEx, but I will use a Visa instead because AmEx charges higher fees (I think that is still true?)

AmEx does charge different fees than Visa and MC but not necessarily higher like it was in the past.

I just got a merchant proposal for our company and AmEx was less than most of the others. Visa/MC are tiered percentages based on the type of card (rewards, premium , etc) while AmEx is tiered based on the purchase amount. A purchase of under $2k with an AmEx is actually over 1% less in fees than the same purchase with a Visa Signature card.

 

[Cruising Engineer]

I wonder if businesses just work the fee into the basic price, just like "Free Shipping" is just worked into the price. I have run into "...oh you're paying with cash, you get a discount" more often than an additional charge for the card. Which means they have the cc fee already worked into the price.

 

[amcnj]

I have been to places that charge extra for credit cards and a different amount for debit cards. I think the debit card fee was lower.

I also have seen some taxing authorities charging extra for electronic checks. Are there costs to entities who accept such forms of payment?

 

[DizMe]

There is a restaurant in my town that won't take debit or credit cards. I hate that because I don't go there often enough to remember, and when the bill comes it's too late to run out and get cash. They 'conveniently' have an ATM in the waiting area that charges a very high fee. I understand that they are choosing to do this because of the fees, but they are not passing the savings on to the customers. The prices are comparable to all of the other restaurants in town of that venue (all of which accept cards), so I don't go there unless it was decided by someone else. I know this is somewhat off topic but I just went there this morning to meet my daughter and was annoyed again to realize that I had to use all my cash, which fortunately I had this time.

 

[SL6827]

This is all very interesting info. A lot of it I didn't know. As I really thought this was illegal to do this, but I guess not.

 

[tvguy]

I have never seen a business charge extra for debit transactions. I have seen plenty of them either charge extra for credit card transactions, or get around the rule (they aren't supposed to charge extra) by having a discount if you pay cash. I tend to avoid those places as much as possible, but I understand why they do it.

Debit card fees are pretty common here in my part of California. Also not uncommon, a minimum purchase amount to use either a credit card or debit card.
Gas stations offer 10 cents a gallon off for cash.

At least in my experience, the businesses that are cash only usually are have great products or service. One little mom and pop bakery here someone complained when I was in there and the owner was honest. "I sell out of every cookie and cake I can bake, so it doesn't seem to be an issue"

 

[verleniahall]

I live in a small town and the business I work at decided NOT to do debit or credit as a form of payment DUE to the fees.

 

[DizMe]

I live in a small town and the business I work at decided NOT to do debit or credit as a form of payment DUE to the fees.

Is it cash only? I would think this might end up hurting a business in the long run, depending on what kind of business it is. I do understand about the fees but can't they include at least part of that in the price?

 

[MillauFr]

So in other words people who cash are subsidizing the credit cards rewards those users are getting.

 

[Ellie008]

So in other words people who cash are subsidizing the credit cards rewards those users are getting.

Yes. I think this is true for pretty much all businesses that accept credit cards. There are fees associated with accepting cc, and they have to build that cost into their merchandise cost or they will be losing money. I would expect they have data regarding the % of their customers who pay cash and so the mark up isn't the full cc fee amount on each item.
I use cc on nearly everything I purchase, so I don't feel cheated by paying the markup. I get the rewards too.

 

[Mackenzie Click-Mickelson]

What made you think it was illegal? Was it that it was a medication?

 

[tzolkin]

What made you think it was illegal? Was it that it was a medication?

I've always heard people say that it was not allowed/ illegal to charge a fee to use a credit/debit card.

I just looked up some information on this because I wasn't sure if that was actually true or not. From what I read, they started allowing surcharges in 2013. However, surcharges are illegal in several states and you are not allowed to add a surcharge to debit card purchases at all. So, it does seem that the OP is justified in believing that they were wrongfully charged.

Even if you were allowed to charge for debit card purchases, the surcharge cannot exceed the actual card processing cost. Debit card processing fees are significantly less than credit cards (usually under 1%), so the 3.5% surcharge the OP paid would also violate this rule.

Debit card fees are pretty common here in my part of California. Also not uncommon, a minimum purchase amount to use either a credit card or debit card.

Are you talking about a fee for cash back with a debit card or a fee to use a debit card for a purchase?

Also, businesses can impose a minimum purchase amount (up to $10) for credit cards, but are not allowed to do so for debit cards.