MADISON (WKOW) -- The next time you swipe your card, you might be saving money if you choose "debit" rather than "credit". That's because of new fees stores in most states, including Wisconsin, can now charge customers.
It's all part of a settlement between Visa, MasterCard and nine banks. Because of the settlement, merchants can now pass on the fees the credit issuers make them pay.
That means customers could be charged 1.5 to three percent more on a purchase if they choose to charge it. The fee doesn't apply to debit transactions or American Express customers.
Walmart released a statement saying the settlement would cost consumers "tens of billions of dollars each year." Walmart representatives released a statement to ABC News the company was "not interested" in charging customers the fee.
The Alliance of Wisconsin Retailers represents stores in Wisconsin from big box retailers Target, Home Depot, and several other name brands in the industry. Spokesperson Scott Stenger says members "...will not be asking their customers to pay any additional costs, surcharge or otherwise," in connection with customer use of credit cards.
Sachi Komai is the president of the Greater State Street Business Association and owns Anthology. Komai says association members are primarily small-to-medium sized businesses, where credit card processing fees represent a significant slice of operational overhead. Komai says Anthology will continue to absorb the processing costs, with no checkout fee for credit card users, and believes most member businesses may choose a similar approach.
But Komai says her business and others are trying to educate the buying public on the cost of a business offering credit card payment as an option. Komai believes if customers used cash more often, member businesses would use the savings to make more hires, and contribute more to non-profit organizations.
A decade ago, Gino's Italian Deli owner Kathy Gargano says she made a decision to address spiraling credit card processing fees by offering customers discounts for cash payment. Gargano installed an ATM in the store to help encourage different buying habits. Gargano says the approach has been well-received, with the percentage of business in cash over credit increasing.
Some view the cash discount approach as a thinly-veiled fee on credit card users, but several small business owners 27 News spoke with indicated some sort of reward for cash payments was a more likely development for their operations, than a fee for credit card transactions. Komai says one State Street business rewards cash customers with free chocolate.
MasterCard says it doesn't expect most merchants to add the surcharge because they don't want to drive away business. Komai says studies show shoppers using credit cards also tend to spend more.
Credit card surcharges are prohibited in ten states including, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
All content © Copyright 2000 - 2013 WorldNow and WKOW. All Rights Reserved.
Persons with disabilities who need assistance with issues relating to the content of this station's public inspection file should contact Program Manager Jessica Miller at 608-661-2794. Questions or concerns relating to the accessibility of the FCC's online public file system should be directed to the FCC at 888-225-5322, at 888-835-5322 (TTY) or at email@example.com.