Surcharges and Discounts: Let’ Make a Deal

Even though the interchange fee lawsuit has not yet been formally settled, terms of the agreement state that 60 days after preliminary approval by the court, merchants will be allowed to place a surcharge on credit card payments. Unlike discounts (which are allowed under the Durbin Amendment) there are a few barriers to applying a surcharge including registering their intent with their acquirer within 30 days of implementing the charge and receipt disclosures. In addition, since networks can incentivize merchants for not imposing surcharges, whether or not a particular merchant intended to do so may never be known.

Where is all of this leading? As merchants have gained the right to apply a discount (and now surcharge) for higher-cost payment cards, it seems more unlikely that consumers are not going to feel some kind of pinch at the point of sale. That probably won’t happen, however, until the economy gains a little bit more strength and just getting consumers to open their wallets becomes a secondary problem.

There was a time when banks and airlines thought they couldn’t get away with nickel-and-diming their customers to death, either.

Read more: http://storefrontbacktalk.com/payment-systems/interchange-settlement-not-done-but-clock-is-ticking-anyway-for-retailer-surcharges/#ixzz2HxR7xohQ

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