Posted on 10-11-2010
I see merchants on a daily basis surcharging for credit transactions, and while I see it more as an inconvenience, the government doesn't see it the same way. Currently there are 10 states with laws against credit surcharging, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Some of these states have very easy ways to report businesses that are illegally surcharging, creating a quick path to fines, bad publicity, and lawsuits.
Apart from state laws, all that an angry customer needs to do is call their card issuer and report the business. The issuer passes the message down to the business's processor, who then tells the business to stop. If more complaints are received, fines are assessed ($10,000 - $20,000 for the first offense), and then the business is shut down and placed on the TMF list by the issuer. They are then prohibited from accepting credit cards by just about every processor in the world until they get off the list.
It's true that many businesses get away with surcharging for a long time, but I urge any business owner to seriously consider the potential consequences from breaking the surcharging regulations. It may seem like a logical idea from a financial standpoint, but the repercussions can be quick and severe.
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