Credit Card Surcharges

Dear Consumer Ed:

How much of a surcharge are merchants allowed to charge you for paying with a credit card?

Consumer Ed says:

Each time a customer pays with a credit card, the merchant must pay a transaction fee to the company that issued the credit card. Instead of merchants absorbing this expense, they are permitted to pass the transaction fee along to the consumer, which is considered a “surcharge”. Importantly, restrictions exist to ensure consumers obtain clear, transparent, and up-front disclosure about surcharges.

Credit card surcharges are usually presented as a fee or percentage of the transaction, though the amount of the surcharge cannot exceed the amount the merchant pays to accept the card. This amount is generally two to three percent of the purchase price. If customers instead opt to pay by cash, check, or debit card, merchants are permitted to offer a discount equivalent to the credit card surcharge that may have been factored in to the regular advertised price, as long as that discount is offered to all customers.

In any case, merchants who add a credit card surcharge onto their customers’ bills must post a sign at the point of entry to the business notifying customers. Merchants must also disclose the exact amount of the surcharge at the point of sale and on customers’ receipts. A note of caution: for online purchases, merchants are only required to disclose this surcharge on the first page where the potential customer is prompted to enter in his or her credit card information.

Regardless of the method of payment, merchants are not permitted to mislead customers, whether by deceptively advertising a lower price than they actually charge or by concealing any differences between credit, debit, and cash prices. If a merchant fails to clearly and conspicuously disclose what it charges for the transaction, including any additional fees, that may violate Georgia laws prohibiting deceptive or false advertising.

Additionally, there have been reports of merchants assessing Covid-19 surcharges. Depending on a variety of factors, the collection of Covid-related surcharges or fees may be permissible. However, at a minimum, any price representations must be truthful and not misleading. Businesses need to provide notice of their policies and other material information before the consumer makes a decision to purchase. The failure to include the surcharge or fee in an advertised price could be considered an unfair or deceptive practice, and potentially be a violation of Georgia law.

If you believe a merchant is improperly charging fees, failing to disclose what it is charging, or otherwise engaging in false or misleading sales practices, you can file a complaint with the Georgia Department of Law’s Consumer Protection Division by visiting consumer.ga.gov or by calling 404-651-8600.

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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