Since credit card processors charge merchants for each transaction, some retailers charge consumers fees each time they use their credit cards at the register. This practice is illegal in California as of the date of publication. Merchants may discount purchases for customers who use cash but may not charge fees to credit card customers and can face serious financial consequences if they do so.
California is one of 10 states that prohibits merchants from charging customers fees to use their credit cards at the register as of the date of publication. Thus, if you use your credit card in a California store, the merchant cannot add an extra fee because you used the card, even if you only charged a small amount. If a retailer charges you a fee for credit card use, you can report him to the Attorney General's office.
Public utility companies such as the gas company, water company or electric company may charge fees to customers who wish to pay by credit card. Only approved public utility companies may charge fees for using credit cards; if a customer purchases utilities from a private company or an individual, that company may not charge the customer extra fees if she chooses to pay her bills using a credit card.
Although retailers can't charge fees for credit card use in California, they have the right to offer discounts to customers who pay using another method. For example, a retailer can offer merchandise at 10 percent off if the customer uses cash and charge full price if the customer pays using a credit card. This is not considered a fee for credit card usage because the merchant is charging the full retail price to credit card customers, not charging them more than the full price.
If a retailer charges an extra fee to credit card customers, he must return the fee to the customer upon written request. If the retailer does not return the fee within 30 days of getting a customer's letter regarding the matter, the customer may sue him for up to three times the actual damages as well as the customer's attorney fees.