These illegal debit card fees just won't die

Some convenience stores and gas stations are still dinging users. Minimum purchase amounts are also no-nos.

By Aimee Picchi May 17, 2013 7:09AM

Woman swiping a credit card © Rubberball/Mike Kemp/Rubberball/Getty ImagesSome gas stations, convenience stores and other merchants are illegally charging fees for debit card users, as well as putting minimum purchase amounts on customers who use the bank cards, according to a new report. 

A January settlement of a class-action lawsuit allowed merchants to start adding "checkout fees" on customers who pay with credit cards, but it exempted debit card users. Despite this, some merchants still hit debit card users, reports.

Ten states -- California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas -- actually prohibit surcharges for credit card users, but that can be a gray area. For instance, gas stations sometimes offer cash discounts. While that's not adding a charge for credit card users, it still effectively dings them when compared with cash customers. 

Another familiar annoyance is when a cash register informs you that the store has a minimum purchase amount, prompting many shoppers to pick up a few items just to hit that figure. But it turns out that both Visa (V) and MasterCard (MA) have stated that minimums can't be imposed on debit cards, according to 

That's likely to be news to most folks. (The minimum can be applied to credit cards, though.)

So what should you do if you've been charged an illegal fee? If you live in one of those states that outlaw credit card processing fees, Visa encourages you to report the retailer to your state attorney general's office. 

Consumers hit with minimum purchases or surcharges on debit cards should also call the customer service number on the back of their cards, the report says. That's because banks that issue the cards will report violations to Visa or MasterCard. 

Follow Aimee Picchi on Twitter at @aimeepicchi

More on moneyNOW

Tags: BanksMAVZ
May 17, 2013 8:54AM

""""So what should you do if you've been charged an illegal fee? If you live in one of those states that outlaw credit card processing fees, Visa encourages you to report the retailer to your state attorney general's office. ........Consumers hit with minimum purchases or surcharges on debit cards should also call the customer service number on the back of their cards, the report says. That's because banks that issue the cards will report violations to Visa or MasterCard. """""



May 17, 2013 10:11AM

Pay cash and demand a 3% cash discount.



May 17, 2013 12:37PM
I understand why small store do this. The vendor fees that banks and credit card companies charge is high and can seriously cut into there margins. How about we lower the vendor fees so they wont feel inclined to put minimum dollars limits or added fees? Once again the small and powerless have to conform to the rules or the large and powerful
May 17, 2013 10:31AM
The small business gets hit the hardest.  Consumers don't realize that it can average up to 4% in transaction and processing fees for the little guy.  And 4% is huge when your trying to compete with the big guy.  Who gets rich here the banks!!!  It would be interesting to know how much it costs Wal Mart and other huge retailers? My guess is little or nothing.
May 17, 2013 11:19AM

The writer of this story misses the real story; the benefits of financial fee transparency in a "free market" , The credit card companies and related banks have done a fine job of getting the 10 states In their back pocket, these states say it is illegal to charge a transparent 2-4% fee; but consumers don't realize there is still a 2-4% hidden fee that the merchant still pays to mastercard and visa;  We pay the fee through higher prices although we don't realize it because its hidden and not transparent.  It de incentivizes cash use and encourages credit card use by not making the fee transparent. 


How much?  If you charge $12000/yr on your credit card you are paying $240 to $480 / yr in fees even in the 10 states.  its just that you don't know it.


Financial transparency helps lower costs in a free market by giving you smart choices,  By not allowing a transparent fee these states are helping the credit card companies take your money without your knowledge.  Whats worse is people who pay cash, debit, or electronic check can't reap the $240 to $480 / yr because we subsidize those who use credit cards.  Except for places like Costco and SPECS that offer cash/debit discounts.






May 17, 2013 1:09PM
I don't ever carry any large sum's of money on me,it's eaiser to just use plastic! Belive it or not there are places that won't take money,any state park in alabama,also writing a check is time consuming and a hassel. You need 3 different  I'ds, plus a pint of blood and the title to your first born child! I also buy and pay all my bill's online,most places will ship for free,so it must not be all that bad!
May 17, 2013 4:09PM
Unless a business does a terrific volume in credit and debit card transactions, they will lose money, especially with what some of these credit card processing companies charge. Sorry, but I don't blame merchants for setting a minimum amount for a credit or debit card charge, or for setting a lower price for customers who pay with cash. If merchants are supposed to accept debit cards for free, then credit card processors should not be allowed to charge the merchant a fee for accepting debit cards.
May 17, 2013 10:54AM
"For instance, gas stations sometimes offer cash discounts."

I haven't seen that for years.  I used to pay with cash as much as practical and always asked about cash discounts, citing the fact the merchant was getting hit with fees if I had used a credit card.  I always got the same "we only have one price answer" - and I'm not in a state where that's the law.

So now I use a cash-back credit card as much as is practical.  I average 2% off.  Those paying with cash are partially subsidizing me.
Aug 16, 2013 11:10PM
I think if Banks and Credit card companies wouldn't charge the small businesses up to 5% on transactions, there would not be businesses doing this. I think if people are O.K. with a uniform 5% increase in the cost of everything, then they should complain about these charges. How are small businesses supposed to make money when they get charged 5% for every purchase.
May 18, 2013 12:40AM
funny that no 1 mentions that using cards only makes profits for Visa and MasterCard and inflates the the cost of goods ...instead of worrying so much about the surcharges ..why not ask why the fees to merchants go up every year from them with only a few thousand employees.. they have such a monopoly and  that the average consumer just keeps giving them more power to get cheated by using them on tiny purchases ..great if you can actually avoid the inflation with the convenience ...otherwise who do you really think is making all the cash....lets see what 3 percent of a Billion a day is ...I think we need to raise rates again....I need a new thing that costs 35 million lets raise by .05 % they won't gripe they like those new colored cards with the promos and rewards that inflate everything also
May 17, 2013 11:55AM
how is it handled when traveling out of country and using a debit/credit card and 3% fee is added when processing - after one has signed the slip?
May 17, 2013 10:23PM

For 2-3 years we got a nickel off per gallon..That's roughly about 1.5%...It stopped about 1 year ago.

Sometimes cash is KING...."But you gotta ask"...Or take your biz somewhere else.

I think the guy is gonna start giving the nickel again, but don't brag about it.


Another station about 40 miles away, gives a dime off a gallon to everyone for cash..

It's on the sign..

Another place about 17 miles gives .38-40 cents off for a Indian Tribal Membership/Citizenship card.

But you have to have the Card for the Local Tribe..

The Card is run through or registered on the Machine...It knocks off some of the Taxes??

Cash or charge makes no difference.....Local Tribe made the deal.

May 17, 2013 12:56PM
Any way to screw the customer in a world that started off with the customer is always right. Now they spend more time trying to screw us than they do at keeping their stores in proper order. 
May 17, 2013 4:10PM
I just spoke with my attorney general's office in Oregon regarding this matter.  I  was informed that it only the 10 states listed in the article is where these rules apply. In other words, if your state wasn't part of the class action law suit, they can charge you the user fees for the debit card.

MSN's writer of this article should have made that clear!!

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