Checkout Fees: Think Twice Before Reaching for Plastic
As a result of a lawsuit settlement, credit card companies have agreed to pay back some of the fees ($8 billion) for unlawfully fixing “swipe fees” – but only for 8 months.
In the past, these annoying fees have been the burden of the merchant, footing the bill for accepting your payment and paying $40-$50 billion in processing fees to credit card companies each year. If you’re a business doing $2 million in transactions a year, you will pay credit card companies up to $80,000. That’s a lot of money to pay in order to receive money.
Good News for Merchants
If they choose to, merchants can now charge customers a checkout fee for paying with a credit card. These fees typically range between 2-3% of the purchase total, but can be as high as 4%. Meaning: customers will be paying up to $40 on top of a $1,000 purchase.
Bad News for Merchants
Merchants probably don’t want to charge this fee to their customers. The credit card companies agree: Mastercard said that they “don’t expect most merchants to put the surcharge into effect, since stores won’t want to drive away business.” Which means merchants will probably continue absorbing the cost of accepting credit cards.
It seems that credit card companies don’t care who is paying them, just as long as they are getting paid.
It’s up to you, the consumer, to decide whether or not you want more of your money to go to your favorite local merchant, or to the credit card companies. Think twice before reaching for that plastic. Consider paying with cash or Dwolla, and help save them thousands of dollars per year.