Hotel - 3% surcharge on credit cards

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is illegal to charge a fee on any debit cards.

This is literally in every merchant agreement with all processors. I am in charge of the merchant agreements and cc processing at my job. We've changed processors loads of times to get better rates and these two main stipulations have been in every agreement: 1) you cannot charge a fee if you do not have that fee posted and 2) you cannot charge a fee on any debit cards. Businesses must eat the $0.34 interchange fee that comes with processing every card type. The interchange fee is the fee that gets applied to every card you charge, whether by swipe or manual entry. It's usually $0.34 + 3.0-3.5% of the transaction total that processors charge as a fee.


The best thing to do is call the number on the back of your debit card and give them the name and address of the business that is charging you the fee. Take a photo of the signs as well. They'll want that submitted. The bank will then go after that business and they'll almost certainly get their merchant ID cancelled and their contract with their processor canceled.

I think you are conflating what's against THE LAW and what's against the merchant agreement. Anyone can charge a fee if they want, legally. Whether they will get shut down by their processor is a separate issue.

The Durbin Amendment (part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) prohibits surcharging debit card transactions, including prepaid cards, regardless of whether they are processed as "credit" transactions. This federal regulation caps debit card interchange fees (e.g., 21 cents plus 0.05% per transaction) and explicitly bans passing these fees to consumers via surcharges to protect consumers from additional costs.

Can I please ask a related question? One of my favorite restaurants (locally owned) charges 3% more for credit cards. If I use my debit card, how do I get them to not charge me the 3% without getting them in trouble?

[Anonymous]

Ask if they charge a fee for debit. Maybe they don't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is illegal to charge a fee on any debit cards.

This is literally in every merchant agreement with all processors. I am in charge of the merchant agreements and cc processing at my job. We've changed processors loads of times to get better rates and these two main stipulations have been in every agreement: 1) you cannot charge a fee if you do not have that fee posted and 2) you cannot charge a fee on any debit cards. Businesses must eat the $0.34 interchange fee that comes with processing every card type. The interchange fee is the fee that gets applied to every card you charge, whether by swipe or manual entry. It's usually $0.34 + 3.0-3.5% of the transaction total that processors charge as a fee.


The best thing to do is call the number on the back of your debit card and give them the name and address of the business that is charging you the fee. Take a photo of the signs as well. They'll want that submitted. The bank will then go after that business and they'll almost certainly get their merchant ID cancelled and their contract with their processor canceled.

I think you are conflating what's against THE LAW and what's against the merchant agreement. Anyone can charge a fee if they want, legally. Whether they will get shut down by their processor is a separate issue.

The Durbin Amendment (part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) prohibits surcharging debit card transactions, including prepaid cards, regardless of whether they are processed as "credit" transactions. This federal regulation caps debit card interchange fees (e.g., 21 cents plus 0.05% per transaction) and explicitly bans passing these fees to consumers via surcharges to protect consumers from additional costs.

Can I please ask a related question? One of my favorite restaurants (locally owned) charges 3% more for credit cards. If I use my debit card, how do I get them to not charge me the 3% without getting them in trouble?

DP. It might depend on who is processing their credit cards. My system automatically adds the fee to credit cards, but it recognizes debit cards and doesn't add the fee. So if the restaurant has automated it with the merchant services, the debit card should be fee-free. If they're manually adding it in, then that's a different story.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is illegal to charge a fee on any debit cards.

This is literally in every merchant agreement with all processors. I am in charge of the merchant agreements and cc processing at my job. We've changed processors loads of times to get better rates and these two main stipulations have been in every agreement: 1) you cannot charge a fee if you do not have that fee posted and 2) you cannot charge a fee on any debit cards. Businesses must eat the $0.34 interchange fee that comes with processing every card type. The interchange fee is the fee that gets applied to every card you charge, whether by swipe or manual entry. It's usually $0.34 + 3.0-3.5% of the transaction total that processors charge as a fee.


The best thing to do is call the number on the back of your debit card and give them the name and address of the business that is charging you the fee. Take a photo of the signs as well. They'll want that submitted. The bank will then go after that business and they'll almost certainly get their merchant ID cancelled and their contract with their processor canceled.

I think you are conflating what's against THE LAW and what's against the merchant agreement. Anyone can charge a fee if they want, legally. Whether they will get shut down by their processor is a separate issue.

The Durbin Amendment (part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) prohibits surcharging debit card transactions, including prepaid cards, regardless of whether they are processed as "credit" transactions. This federal regulation caps debit card interchange fees (e.g., 21 cents plus 0.05% per transaction) and explicitly bans passing these fees to consumers via surcharges to protect consumers from additional costs.

Can I please ask a related question? One of my favorite restaurants (locally owned) charges 3% more for credit cards. If I use my debit card, how do I get them to not charge me the 3% without getting them in trouble?

DP. It might depend on who is processing their credit cards. My system automatically adds the fee to credit cards, but it recognizes debit cards and doesn't add the fee. So if the restaurant has automated it with the merchant services, the debit card should be fee-free. If they're manually adding it in, then that's a different story.

Thank you, I’ll check.

[Anonymous]

Anonymous wrote:Ask if they charge a fee for debit. Maybe they don't.

Op here. Sign specifically states “credit / debit card payments”

[Anonymous]

Anonymous wrote:That's so weird because most hotels want a credit card on file for things you didn't pay for and things you destroyed.

Op here. I did need to provide a card for “incidentals” at check in.

[Anonymous]

Anonymous wrote:

Anonymous wrote:CC companies generally charge the business 3%. Small businesses (especially Mom & Pop type) have always passed that 3% along to the customer. If hotels are now doing it, they are increasing their revenue by 3% by no longer paying the fee themselves.

This hardly seems legal in that a hotel bill can easily be in the 1000s. Who carries that kind of cash around, or leaves in their room when not out and about.

It's legal in most states for merchants to pass along credit card fees to their customers. 3% is not small--that's why you see smaller vendors moving to Square, Stripe etc...and in other countries there are QR codes that debit your bank account which are much much cheaper to transact with.

Stripe and Square charge the same fee as credit card processors for credit cards. Sit and think on that until you figure out why.

[Anonymous]

legally most states can only charge this on use of a credit card, if you pick DEBIT to check out legally they're not allowed to charge that fee however no one seems to be enforcing this law.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:CC companies generally charge the business 3%. Small businesses (especially Mom & Pop type) have always passed that 3% along to the customer. If hotels are now doing it, they are increasing their revenue by 3% by no longer paying the fee themselves.

This hardly seems legal in that a hotel bill can easily be in the 1000s. Who carries that kind of cash around, or leaves in their room when not out and about.

You're a youngster. Before 2013, it wasn't permitted. But a bunch of merchants sued Visa/Mastercard for excessive fees and this was part of the settlement.

Exactly. The fee was always a cost of doing business absorbed by the vendor. The only thing I remember as a kid having a different price cash vs credit was gas at the gas station.

Just because the fee wasn’t itemized doesn’t mean you weren’t paying for it, the same way you pay a portion of all overhead - rent, electricity, internet, etc - any time you patronize a business.

[Anonymous]

Is a check an option? You would think merchants wouldn’t want checks because of the probability of it bouncing. If a credit card is overextended, it gets declined and the patron has to use another card.

[Anonymous]

I just bought a $15 flat of flowers from a small mom & pop nursery. Before I paid I was told in lengthy detail, not only by the cashier but also the credit card machine itself, that I’d be responsible for the 3% fee. All that for $0.55!

[Anonymous]

Who pays for a hotel room not with a credit card?

Most major chains just hide the cost into the fee of the hotel room.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is illegal to charge a fee on any debit cards.

This is literally in every merchant agreement with all processors. I am in charge of the merchant agreements and cc processing at my job. We've changed processors loads of times to get better rates and these two main stipulations have been in every agreement: 1) you cannot charge a fee if you do not have that fee posted and 2) you cannot charge a fee on any debit cards. Businesses must eat the $0.34 interchange fee that comes with processing every card type. The interchange fee is the fee that gets applied to every card you charge, whether by swipe or manual entry. It's usually $0.34 + 3.0-3.5% of the transaction total that processors charge as a fee.


The best thing to do is call the number on the back of your debit card and give them the name and address of the business that is charging you the fee. Take a photo of the signs as well. They'll want that submitted. The bank will then go after that business and they'll almost certainly get their merchant ID cancelled and their contract with their processor canceled.

I think you are conflating what's against THE LAW and what's against the merchant agreement. Anyone can charge a fee if they want, legally. Whether they will get shut down by their processor is a separate issue.

The Durbin Amendment (part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) prohibits surcharging debit card transactions, including prepaid cards, regardless of whether they are processed as "credit" transactions. This federal regulation caps debit card interchange fees (e.g., 21 cents plus 0.05% per transaction) and explicitly bans passing these fees to consumers via surcharges to protect consumers from additional costs.

Can I please ask a related question? One of my favorite restaurants (locally owned) charges 3% more for credit cards. If I use my debit card, how do I get them to not charge me the 3% without getting them in trouble?

DP. It might depend on who is processing their credit cards. My system automatically adds the fee to credit cards, but it recognizes debit cards and doesn't add the fee. So if the restaurant has automated it with the merchant services, the debit card should be fee-free. If they're manually adding it in, then that's a different story.

I called the restaurant to ask. While I surely spoke to a young person whose knowledge is limited, they did say that the system adds the charge to any card used, credit or debit. I’d love to know how to push back on this without getting into an argument with some poor young person who is only doing their job.

[Anonymous]

Anonymous wrote:legally most states can only charge this on use of a credit card, if you pick DEBIT to check out legally they're not allowed to charge that fee however no one seems to be enforcing this law.

+1 Debit cards should be fee free as part of Dodd Frank I believe. But with CFPB getting gutted, not sure who would enforce that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:CC companies generally charge the business 3%. Small businesses (especially Mom & Pop type) have always passed that 3% along to the customer. If hotels are now doing it, they are increasing their revenue by 3% by no longer paying the fee themselves.

This hardly seems legal in that a hotel bill can easily be in the 1000s. Who carries that kind of cash around, or leaves in their room when not out and about.

You're a youngster. Before 2013, it wasn't permitted. But a bunch of merchants sued Visa/Mastercard for excessive fees and this was part of the settlement.

Exactly. The fee was always a cost of doing business absorbed by the vendor. The only thing I remember as a kid having a different price cash vs credit was gas at the gas station.

Just because the fee wasn’t itemized doesn’t mean you weren’t paying for it, the same way you pay a portion of all overhead - rent, electricity, internet, etc - any time you patronize a business.

+1 They just build it into their pricing structure.