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Credit Card Checkout Fees

January 22, 2013, 9:50 PM by Angela Kennecke

Credit Card Checkout Fees

A $7 billion settlement between credit card companies and merchants over swipe fees also allows retailers to start charging customers who use credit cards.  That so-called checkout fee can start on Sunday.

Every time you swipe your credit card at a store, the merchant pays the credit card company between one and a half and four percent of the transaction.  That's one reason why dog groomer Ronita Olson stopped taking them at her shop.

"At the end of the year, I would sit and look at it all and I thought, 'Wow, that's really a lot of money that I'm spending on the credit card charges and fees and whatnot.'  So five years ago, we stopped taking credit cards and we didn't raise our prices that year," Olson said.

But starting Sunday, merchants can offset their costs by charging a checkout fee of no more than four percent of the transaction to customers who use credit cards.

"This was to resolve some long-standing issues about interchange fees and the banking industry's point of view is this is something they agreed to in a step toward just putting this issue behind them," President of the South Dakota Bankers Association Curt Everson said. 

The checkout fee would not apply to prepaid cards, like gift cards or debit cards, whether or not you hit the "credit" button.  
Retailers must also post signs on the door and at the cash register letting you know if you use a credit card, you will be charged a checkout fee.  Your receipt also must show the dollar amount you were charged. 

Olson says she'd consider imposing a checkout fee if her customers are willing to pay it in order to use a credit card. 

"We have a lower price compared to our competitors for many different reasons, but I think that credit cards are one of the reasons.  I'd possibly think about it as long as it wouldn't upset people, as long as it's what they want," Olson said.

Ten states have laws that don't allow surcharging, but South Dakota, Iowa, Minnesota and Nebraska are not among them.  You'll want to make sure before you swipe your credit card if checkout fees are in place.  We were unable to find any retailers who say they will be charging a checkout fee in KELOLAND.

More on checkout fees.

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