Chances are that if you've been out shopping around the Sioux Empire lately that you've noticed some businesses tacking on extra fees when paying with a card.

Coming out of the COVID-19 pandemic, it seems that more and more businesses are warning customers when checking out that prices will be higher when using a card at checkout. Paying cash? The price stays where it was before.

So why is there an extra charge for using a card? Merchants are charged a "swipe fee" and other processing fees from card providers such as VISA, Mastercard, and American Express. Typically, businesses have eaten the cost of those fees or raised prices as a way to build it into the product. But, a settlement enacted in 2013 gave merchants the opportunity to put those credit card fees on the customer.

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According to the South Dakota Consumer Protection, the 2013 settlement granted merchants the right to charge up to a maximum of 4% extra for using a credit card. This fee can not be used for people paying with a debit card or prepaid cards.

In order to charge the extra fee, each merchant that does so much follow the following rules according to the office of Consumer Protection:

  • "The surcharge cannot exceed the amount that the merchant actually pays to accept credit cards - between 1.5% and 4% of the transaction amount.
  • Surcharges can be imposed on commercial and consumer credit card transactions only, not on purchases made with debit cards or prepaid cards.
  • Merchants must disclose the credit card surcharge clearly - at the store entrance and the point of sale or on the homepage if the merchant does business on the internet.
  • The disclosure must include the amount of the surcharge, the fact that the fee is being charged by the merchant, and that the fee does not exceed the merchant's cost to accept credit cards.
  • The dollar amount of the surcharge must appear on the transaction receipt."

Yes, those extra fees for using a credit card do exist and are legal. Those wanting to avoid them are able to by using a debit card, prepaid card, or cash.

But at least you know your rights when you see a merchant/business putting those fees on to you when you checkout now.

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