Ask Andy: "swipe" fees - Action News 5 - Memphis, Tennessee

Ask Andy: "swipe" fees

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MEMPHIS, TN -

(WMC TV) - A viewer came up to me at the grocery store. He complained about smaller retailers charging a check-out fee -- or a "swipe" fee -- to use a credit card instead of cash.

He asked, "Is that legal?"

Yes, it is.

After a $7 billion class action settlement between merchants and the big credit card companies, merchants earned the right to charge their customers a swipe fee to cover the costs that Mastercard and Visa charge them to provide card services.

It's just the cost of doing business.

But according to Forbes magazine, the Electronic Payments Coalition and The Consumerist, there are rules to these swipe fees:

* The fee must equal the cost of the card service. 

* The fee can be levied on credit cards only, not debit cards. 

* The merchant must disclose the swipe fee, either with a sign at the point of sale, at the store's entrance/exit or on your receipt. 

Merchants also have the option of "eating" that fee instead of passing it along to their customers -- or at least passing it along only when somebody tries to charge something like a pack of gum on their credit card.

You can report alleged swipe fee violations to the Consumer Financial Protection Bureau.

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