Decision to charge fee a local decision

As of Jan. 27, 2013 business owners are now allowed to charge customers with a surcharge fee of up to 4 percent extra when customers use a credit card to pay for their products.

Whether or not to charge the extra fee is up to each individual business retailer and although using a credit card may result in the surcharge, debit cards will remain untouched.

According to a Reuters article by Atossa Araxia Abrahamian, this surcharge can apply in 40 U.S. states – California, New York and Texas are among those outlawing the charge. The state of Nebraska is allowing the new fee for now.

Retailers are required to make it known to customers if they will be including the surcharge before purchase.

“The surcharge is the result of the biggest anti-trust settlement in U.S. history,” according to Abrahamian. “In 2005, a group of merchants claimed that MasterCard, Visa, and nine other companies including JP Morgan Chase & Co conspired to fix the fees that stores pay to accept credit card purchases.”

“As part of the settlement, the merchants are allowed to charge customers a fee equal to the cost of accepting cards, typically 1.5 percent to 3 percent of the purchase price,” said Abrahamian.

There is much debate however on which credit cards will produce an extra charge.

Some of the larger retailers such as Wal-Mart, Target, Home Depot and Sears told an NBC News contact that they are not planning to charge the new credit card fee.

The fee that a retailer has to pay to the bank every time a customer uses a credit card is called an interchange fee. Most customers may think that when they pay an amount with a credit card that 100 percent of that money goes to the retailer.

That is incorrect; a small percentage goes to the customer’s bank, the retailer’s bank and the network supplying the machine that swipes the card, according to information from the Federal Reserve via the Business Insider.

Although major businesses said that they doubt a change will be seen and that very few businesses will look into applying the extra fee, small businesses are said to be questionable.

Local businesses are thought to see the most change, as they see more of an impact from being charged for running credit card transactions.

Some Sidney retailers said that they will not change the way they conduct business, while others said that the new law is so fresh that they haven’t had time to sit down and iron out all the details and what it could mean to their business if they adopted the fee.

“No, we aren’t going to charge the extra fee. I can understand why some businesses do it but I think you just bill the extra fee into your pride. It’s kind of like Las Vegas charging a $19.99 resort fee,” said one Sidney business owner.

“I don’t think that customers realize that the retailer pays a fee every time they swipe their card,” another merchant said. “But we won’t be charging the fee; I think paying it comes with the territory.”

Other local business owners said that they were sent information but haven’t had the chance to look over all the logistics and make a decision on whether or not to apply the fee yet.

Some also said that they understand the new fee could steer away business and that they are not willing to take that risk.