It's always the consumer that gets hosed in the end. In case you haven't heard yet, Visa and MasterCard recently reached a hefty settlement with a number of retail groups as a result of a class-action lawsuit initiated back in 2005. Not only will Visa and MasterCard pay over $7 billion to these retail groups, but part of the agreement gives merchants the ability to charge consumers an additional fee for using credit cards to make purchases. Wonderful.
Does this sound familiar? It should, because it wasn't too long ago that a similar agreement was made with retailers regarding cash purchases, which allowed businesses to give consumers discounts if they left the plastic in their wallets and stuck with greenbacks. I don't know about you, but I haven't received a single discount for paying with cash yet.
What I have seen are a lot signs at convenience stores and other small businesses that say I need to spend at least $5 in order to use my credit card. I hate that. It's annoying, but hey—I obey and then simply take my business somewhere else so I can enjoy the convenience of using my rewards credit cards. Their loss. So what should we all expect when retailers can legitimately charge us more if we want to use our credit cards? I suspect big retailers like Walmart and Target won't charge anything. They certainly don't want to drive away loyal customers, and they're big enough to absorb the swipe fees as a cost of doing business.
No one can argue the value they receive by accepting credit cards. Small businesses, on the other hand, will have to think about this one very hard. Swipe fees can become a sizable cost of doing business for a small retailer, but will their customers just take it on the chin and actually pay an additional fee for using credit? I like supporting small businesses whenever possible, but I really love my plastic too (and its rewards). Would I avoid a place if I knew they were going to show a separate line item on my receipt with a interchange fee of up to 3%?
Yes, I definitely would, and I suspect a lot of other Americans feel the same way. We love our credit cards. How about you? Would you be willing to pay an extra fee to use your credit cards? If so, we'd love to hear why and for what type of service in the comments below. Photo by Shawn Rossi
