First, here’s the rundown on the new changes. As of January 27th, retailers now have the option to charge for using a credit card to purchase goods at their store. According to Consumer Watch, retailers can pass along their exact transaction costs to you, resulting in an extra fee of 1.5 – 3% on every transaction (or up to 4% for AMEX). Online retailers can do the same, but they are required to tell you upfront; no surprises at checkout.
Most of us will refuse to pay an extra transaction fee, a point not lost on retail companies. Most are saying they won’t pass that fee on to shoppers. The biggies, including Walmart and Target have declared there won’t be any change to how they do business. Shoppers will continue to shop and swipe and pay the standard price for products.
Why It’s Good For You
Retailers are permitted to offer discounts to consumers who choose alternative methods of payment, such as paying with cash or a debit card, so savvy shoppers can use this to their advantage. For instance, Target is already offering a 5% discount on every purchase you make with their version of a debit card, the Red Card. There is also much talk among analysts that stores will begin offering significant savings for those paying cash, something you should already be doing if you read this blog.
Each state has the right to ban these swipe fees and, so far, 10 have: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.