I had to use my debit card in my local shop this morning and was charged a 50p fee for doing so and wondered if this was legal?
Yes, its legal. If its under a certain amount (usally £5 or £10) a lot of places charge you for using a card, as they also get charged by the card issuer. I'm led to believe this isn't the case for contactless - can anyone confirm?
Where I use to work they would charge you a "Admin Fee" of 25p if the amount you were spending on your card was less than £4.25 iirc, and it didn't matter what method you were using whether it was contactless or pin entry. They had it worked out just right though, because the cash machine in the canteen would always stop working each day apart from weekends at 9am till 10am and then at 11:30am till 14:00pm, meaning if you didn't draw any cash out you had to pay by card. Bunch of rip off's especially when they were charging around £1 for a bar of chocolate and £1.20 for a piece of fruit regardless of size.
It's because they themselves are charged fees by Visa / Mastercard / American Express for processing payments made by card - for transactions below a certain value they only makes pennies in profit which would be totally wiped out by the fee they are charged if they didn't pass it on to you.
Its still a bit galling though isn't it, when you are only spending a few quid. Blame the card issuers I guess!
My local shop does the opposite - rather than charge a fee they simply won't take card payments for payments less than a certain value which just leads to people grabbing more off the shelves - I guess it's better to get something for the extra you're paying instead of nothing
It's always struck me as a bit daft to penalise card usage as there's a cost associated with accepting and handling, storing and processing cash as well - no it's not as transparent as the fee with accepting card payments, but it's there.
Interesting you should say that (it is a rarely mentioned fact...), unless you can pocket the cash, which is hard to do in a legit and well set up business, cash is risky and costs to bank. Where I used to work [high end photo retail], we used to have people shocked when we couldn't do them a 'deal for cash'! We'd suggest they use a debit card with a 25p flat fee; which is far better for the profitability of a deal, usually in the £1,000s.
VISA forbids surcharging unless local law allows it : http://usa.visa.com/personal/get-help/checkout-fees.jsp And this is probably the most detailed info you can find : https://www.gov.uk/government/uploa...ction-payment-surcharges-regulations-2012.pdf
Well at least you didn't use American Express, I used to work in a shop where we'd put a 5% surcharge into any Amex payment, because that's how much Amex scalps off a transaction. But yeah, that's not uncommon in small businesses, they get hammered by transaction fees.
5%? So that's why the NASA gift shop at Cape Canaveral didn't take Amex at all when some friends went there a few years ago.
AMEX was a real pain to use. Everytime I'd have to ask, 'do you accept American Express' before a purchase! Have a Capital One MasterCard now which is fantastic. Shame they stopped cashback but the foreign exchange rates are second to none and they don't charge fees!
Amex cards usually offers rewards/cashback which came from charging the retailer. Fair game IMO as everything is marked up to cover for these costs anyway.
I take clients out a couple of times a week and it was a nightmare when I had an Amex as many smaller restaurants just wouldn't take them. This was largely due to how quickly Amex gave them the money so therefore really hit their liquidity.
If you inform Visa they're doing this, at least in America, they'll remove their licence to use Visa. Its against the Small Print they signed when they started accepting Visa. I think it applies in the UK as big stores (with actual lawyers) tend not to charge - or they can just absorb the cost so don't bother.
Stotherd-001, that is not true anymore, see above : http://usa.visa.com/personal/get-help/checkout-fees.jsp
fee`s on debit cards recently changed http://www.cardswitcher.co.uk/2014/10/uk-card-processing-fees-to-change/ 0.2% +1p to a maximum of 50p so if they are charging you the full 50p they are earning money from you for using the card.
