Reader Brandon sent us this picture of a McDonald’s violating its merchant agreement by charging a fee for using a credit or debit card. The text reads, “FEE ASSOCIATED WITH CREDIT/DEBIT CARD OF 25¢ WILL BE APPLIED TO CARD TOTAL.”
As we’ve previously suggested, Brandon reported the violation to Mastercard and Visa, as well as to McDonald’s headquarters. To reiterate: most credit card companies’ merchant agreements forbid merchants from requiring a minimum charge to pay with a credit card, asking for ID when you pay with a credit card, or adding a surcharge for paying with a credit card (merchants are usually allowed to give a discount for paying cash, however, if it’s clearly labeled as such), and we encourage readers to report violations directly to the credit card company using the info here.
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@Michael Belisle:
‘Personally I don’t give a rat’s arse whether I should check ID’s or not.’
“Oh. Maybe that explains it. There’s no shame in a bit of civil disobedience.”
I think you’re taking him a little out of context there. Dunno if you are doing it intentionally or not but it’s not a nice way to try to win an argument.
@sodden: You might be right, in which case it was unintentional. I see now that Mr. Shill was probably saying he doesn’t care about the debate about whether or not he should check IDs. But, since he frequently shows up to defend ID checking, the evidence suggests otherwise.
At any rate, the jury shall disregard the second-to-last paragraph of my previous post.
quick question…does this include debit cards? And is this illegal in Texas?
@twophrasebark: What he’s trying to get at is that it is illegal/against policy for a merchant to go “You’re using a CC – so I am going to charge you extra.
BUT it is NOT illegal for the third party system that processes the fee to charge you a fee for using their third party system.
In other words, you’re not being charged more for using a credit card, but you are being charged a fee for using a third party’s system. It’s similar to being charged for using an ATM.
@mebaman:
Illegal in Georgia, too, if I recall correctly.
In the early days of Consumerist, didn’t we get some little ice cream store to change their minimum purchase requirement? Seems we could bring that awesome power to bear here as well.
One factor some are forgetting is that the fee can be legally charged if a “DEBIT” card is used, buuuut should NOT be charged is you use an actual CREDIT card, or use the debit card as a “signed authorization”, or press “credit” (not debit) button, if available.
That being said, since most terminals now accept a debit card without PIN or signed authorization by default under anywhere from 50-300 bucks, it processes it as a PIN’d debit card transaction and hence the fee can be assessed.
I blame Visa/MC and the interchange companies.
@sodden: Actually…Costco takes American Express too.
@JoeTan: It’s actually a little worse than that. Not only are the credit card companies advertising that it’s “cool” to make every purchase with plastic, they are explicitly advertising to clients that they should run the charge in a specific (more expensive to the merchant) way . . .
But they don’t phrase it that way, of course: I got something from my bank a while back, telling me I’d rack up the “rewards” points faster if I would use my bank card as a credit card rather than as a debit card. (The slogan was something like “skip the pin”.) The only logical reason for them to be advertising that is higher fees paid by merchants on a credit charge.
How many merchants are now eating even higher processing fees now, so that tons of people accumulate points towards stupid “rewards” at a slightly faster pace?
For as much as consumerist encourages readers to report violations directly to the credit card company, I wish the Consumerist could have an interview directly with the credit card companies to hear what they do to follow through with these violations. Never have we heard of a credit card company removing its merchant agreement for a company.
@doctor_cos: It’s illegal in New York State, too.
@jenl1625: but you’re ignoring the benefit to the merchant entirely here. it’s widely held that people who use a card to pay for purchases spend more than if they use cash. here’s a decent article that explains the phenomenon a bit –> [www.courierpostonline.com]
i can honestly say that i’ve found myself doing this also. if i walk into a store with $20 looking to buy something for that amount, but i find other things along the way i need/want, my card comes out & my purchase balloons not just by the cost of a few items, but sometimes thrice my original target cost.
mcdonald’s is not immune to this trend. people will go in expecting to buy dollar fries & walk out with a large-sized double qp w/ cheese, a happy meal, 2 apple pies & a shake.
& it’s not as if the margin doesn’t exist to pay merchant fees in this instance. mcdonald’s restaurants are some of the most highly profitable ventures around. franchise owners often create enough wealth within a few years to expand their chains across entire regions.
but they can’t afford interchange fees?!?
I have a favorite eatery that charges $0.50 on credit card use under $10. I complained loudly, explaining that it was illegal under California Civil Code section 1748.1 and they waived them to shut me up. The same person usually takes my order and she always waives the fee. They still charge it to other people and I have to make a stink every so often when somebody else is at the register, but that’s fun.
@Michael Belisle: I kind of like that some places ask for me to show ID when I don’t have to enter a PIN for my debit/credit card.
I’m sure there are all sorts of apparent rights violations going on, but I’d rather someone ask for something that I carry on me anyway for that specific purpose than have someone do a little identity theft.
@Miguel Valdespino: I’m sure it’s fun to help credit card companies make money by convincing you that you have to charge for every purchase under the sun!
Why don’t companies just raise prices to cover the average cost of the fees over time? That might be difficult for a MacDonalds, since even the franchises have to price within a range, but most businesses can set the cost of goods and services.
Me? When I started accepting credit cards, I raised my prices to cover the cost (and make more money). I also raise my prices when I add other conveniences for my customer.
I don’t believe in surcharges. I also don’t believe in worrying about the dime profit I’m losing on a pack of gum, when overall, I’m in the black to my satisfaction.
If you attempt to use the DMV online service in NJ (i.e. re-upping a car registration), there is an additional $2 – $3 fee that is 100% to offset the credit card usage charge (it’s in their FAQ). So, instead, I mail a check with a $.4X stamp, and have a human process the request and mail it back. Not sure the labor rates at the state, but I image it has to cost at least a couple dollars for a human to handle a real live check. Who knows….
My local convenience stores ask to have a purchase over five dollars for card transactions, which I don’t mind because they’re mom-and-pop shops which deserve the little money they’re making.
Taco Time, however, can eat it. I think I might just file a complaint right… about… now.
@Corporate-Shill: Thanks for the answer, which by the way is definitely illuminating.
@Concerned_Citizen:
Simple: The credit card lobby is stronger than the small business lobby.
I was going over my checkbook and could not figure out why there was a 25 cent charge from a place called Adele Services.
That’s when I looked up this place about McDonalds!! What cheap shot!!! Can’t put McDonalds on the invoice, what a way to rip off the little people, when they make billions!!!