Because of growing consumer resistance, the government has increased regulation with regard to the surcharges many merchants add to transactions. Merchants often use these fees to cover extra expenses, such as credit-processing charges, shipping fees or fuel costs, though some merchants use them to boost profits. Merchants may assess these fees using percentages or as a flat rate. Most states have laws governing the imposition of surcharges.
A credit-processing fee is a common surcharge that consumers encounter. Merchants typically charge this fee to consumers when credit cards aren't the preferred method of payment. Other common surcharges are the fees banks charge customers for the use of their ATMs, and the fees they charge customers who make withdrawals out-of-network.
Credit Surcharge Regulations
Some credit card companies, such as Visa, don't allow merchants to charge extra fees for the use of their cards. The credit card companies that do permit surcharges typically state that the merchant can't impose charges to cover the credit card company's processing fees. Instead, the merchant can only impose a surcharge if it is inconvenient for him to accept a credit card and he makes it clear that he prefers other methods of payment. Some states prohibit merchants from imposing credit charge surcharges for any credit transaction. However, government agencies, such as tax collectors and state-sponsored colleges, usually aren't subject to this law.
ATM Surcharge Regulations
Banks that impose ATM fees for withdrawals usually waive these costs for customers who have an account with the bank, but some states prohibit banks from charging convenience fees when any customer makes a cash withdrawal. In states that permit ATM fees, the Electronic Fund Transfer Act requires banks that charge ATM fees to place notices around the machine informing consumers of the surcharge. By law, notifying consumers on the ATM screen only isn't sufficient.
Fuel Surcharge Regulations
Fuel surcharges are common among airlines and trucking companies. Businesses that impose fuel surcharges usually determine their own policies for applying and calculating them. Most companies only impose these charges when the cost of fuel rises above a certain level. The law requires airlines that charge extra fees for fuel to make customers aware of these fees when they purchase tickets by clearly stating the surcharge price on the customer's itemized bill prior to payment.
- Fox Business; Banks Forced to Pay Consumers Over ATM Fees (You Read That Correctly); Kate Rogers; April 2011
- Visa: Visa Warns Consumers about Retailer Checkout Fees
- Merchant Council: Charging a Credit Card Convenience Fee on Transactions
- Smarter Travel; Can We Clear up the Airline 'Fuel Surcharge' Mess?; Ed Perkins
- Photo Credit Thinkstock/Comstock/Getty Images