Credit card/debit card surcharging

[vernon]

I was in the process of buying some maps from http://www.mapsworldwide.com/ until I got to the checkout and spotted that they surcharged all payment methods apart from cheques.

This practice used to be common a couple of decades but I though it was strongly discouraged or outlawed.

Maps Worldwide have not got my business and I'll not contemplate using them in the future. I know that this is straightened times but surcharging is taking the mickey.

 

[twentysix by twentyfive]

How bizarre to surcharge cards on the net. I suspect they catch many of the unwary that way. If word gets out their business will suffer.

 

[vernon]

How bizarre to surcharge cards on the net. I suspect they catch many of the unwary that way. If word gets out their business will suffer.

Customers will have to be very dozy to miss the surcharge 'feature'. It's very prominent and I'm sure that it has cost them many sales.

 

[Piemaster]

I've come across it in Europe before, and occasionally in UK. The charge is usually whatever percentage of the transaction that the credit card company take as their fee (something like 1 1/2 - 2% ??). Never seen it on a website though. After all, how likely is it that you are NOT going to pay on an online order without using a cc?

 

[Gerry Attrick]

Yes it is legal, but of doubtful morality IMHO. Even the DVLA do it if you purchase your tax disc on line using a credit card. Traders say they have to recoup the charges they pay to the credit card company but in most cases the CC companies' charge is considerably less than the retailer's charge to you and me. The thing is that in the case of retailers accepting various forms of payment, a penny or two across the range of products would more than cover the CC companies fees.

It seems to be a way of making the retailer's wares appear cheaper than the really are in the same way that outrageous postage and packing charges do.

There are plenty of other sellers who do not make such charges.

 

[HLaB]

Its perfectly legal as long as its stated somewhere albeit annoying. The one that annoys me is where a site says it'll charge for a credit cards but not a debit. I'm maybe wrong but I think there is more payment protection with a credit card, so if its a site I've not used before I'd rather not.

 

[Piemaster]

Thinking about it, I'm sure there is something on the bottom of Morrisons receipts to the effect that a % is a fee paid to the cc company.Haven't got one with me to check though.

 

[david1701]

weird on a website, we do it on small transactions in my mums shop because it can be quite a big chunk if they're dropping 2.50 on a card but not other wise

 

[Bromptonaut]

AFAIK credit cads charge a percentage commission which will vary according to the 'deal' a particular retailer has with it's provider. Debit cards generally are generally charged for by the shop's bank as a flat fee per transaction. Thus a charge of x% (or A £fee) on the total invoice value might be a reasonable way for the retailer to protect his margin. A charge in £ per seat as charged by lo co airlines is simply an extra.

The bit on supermarket receipts (which I'd not noticed recently) was a VAT dodge. Store group sets up a processing subsidiary and (notionally) pays it say 2.5% of transaction value as a fee. That 2.5% is/was IIRC zero rated for VAT so the shop was effectively trousering the VAT on that part of the invoice - quite an earner on a turnover of milions.

I'm sure HMRC would have challenged it and it was working its way through the VAT and Duties Tribunal.

Chris KH or somebody who understands this stuff will be along in a minute with a more cogent explanation.

 

[bikepete]

AFAIK it's normally specifically against the terms and conditions of the credit card processing contract to surcharge for cards. It certainly is on the system I use for Velo Vision. Obviously the card providers do all they can to prevent it, as any surcharge is a disincentive to use their systems.

I guess Ryanair etc. have enough leverage to negotiate non-standard contracts but if it's a small merchant I'd be highly surprised if they weren't breaching their terms.

 

[vernon]

I was under the impression that retailers took the hit because they attracted business by accepting card transactions. The increased turnover mitigated the cost of the card transaction.

I don't know of any conventional retailer that hits the customer for the cost of the card transaction apart from corner shops who either refuse card transactions for goods costing less than a stated amount or will surcharge the customer - this I can understand when the transaction fees can wipe out the profit.

 

[ASC1951]

Yes it is legal, but of doubtful morality IMHO.

Why? There is a small but significant risk that they are selling to someone with a stolen credit card or one that will be dishonoured. Very few online retailers charge for paying by debit card.

 

[buggi]

credit card companies charge the business so sometimes they pass the charge on, but banks don't charge for debit card use, so for a business to charge for using a debit card is naughty

 

[Dan B]

Totally legal provided the retailer is not making a profit on it (i.e. he is simply passing on the charge that he has to pay), and merchant services are forbidden from adding Ts&Cs that forbid it. See

https://support.sagepay.com/forum/Topic673-23-1.aspx

And FWIW, the fees on debit cards are different (usually flat fee instead of percentage) hence they tend to be treated differently

 

[swee'pea99]

I'm currently paying BT to have a recorded message on my old phone number that tells people my new number. This service costs £35 a quarter. Except that my bill is for £15.42 (for the first month). Why? Because there's a £3 'payment processing fee'. That's right - they charge me £3 to take my money.