Reader Brian wants to know how to tell a “surcharge” applied to a credit/debt card transaction vs a convenience charge?
To that end he sends this above example of a sign he saw at a gas station. Is this type of charge allowed?
Under the VISA rules, how do you tell a “surcharge” applied to a credit/debt card transaction vs a convienence charge?
My wife recently went to get gas at a local gas station that was historically the highest priced gas in the area. Upon pulling up to the tanks, the actual low price was modified up by .10 a gallon for using any non-cash method of payment. Under MC/Visa rules, this looks to be prohibited, but how can you tell?
She didn’t know any better and got gas there anyway, but when she got home I knew it was fishy.
Brian, you were right to think this was fishy. Gas stations are supposed to advertise a “cash discount” rather than a fee for using a credit card. This prevents people who pull over because they saw the posted price from getting an unpleasant surprise when they go to pump their gas. You should report this gas station to your credit card company.
An article from the Houston Chronicle shows that a some gas station owners don’t understand their credit card contracts:
Bolduc said his contracts with the credit card companies forbid him from offering a discount for cash.
LeLacheur said some stations have contracts that allow them to offer a cash only discount and those discounts are becoming more common.
Other stations simply defy the credit-card company and let the company sue them, he said.
Visa Inc. and MasterCard Worldwide said in corporate statements that retailers, including gas stations, can offer a cash-only discount.
Visa said the cost of accepting credit cards is set by oil companies, not by Visa.
A “convenience” fee only comes in to play when the business normally doesn’t accept credit cards. Clearly, this doesn’t apply to gas stations.
For a more in depth explanation of the rule, click here.
Card fees can eat up profits at the pump [Houston Chronicle]