Credit card fees could add to your costs
Photo: Video by kgun9.com
Reporter: Craig Smith
TUCSON (KGUN9-TV) - Here's yet another thing that could place a pull on your pocket---if you like to use credit cards.
A lawsuit settlement could prompt stores to add between one and three percent to your bill.
When you hear paper or plastic at the grocery the question could mean paper money or a plastic credit card.
Several big retailers sued Visa and Mastercard over their processing fees.
Before, card companies didn't allow merchants to pass on those fees to customers. Now a tentative settlement could allow stores to stick you with the bill.
It's called the swipe fee. Card companies charge businesses up to three percent when you use your card.
Merchants had to agree not to pass on the charge to customers. Now a settlement says they can charge. But shoppers like Elsa Milligan, say they'd better not.
She says, "Having a credit card machine, people will spend more money and it's to their advantage to have a credit card it's gonna cost them more money. So why should they charge us for it?"
Cards cover about 80 percent of the business at Salon Kai on Grant. Bernadette Martinez says customers are already looking for cheaper ways to look good, so it would be bad for business to pass through a few extra percent.
"So they're already becoming more, I think conscious of how they spend their money in the salon so I really don't want to do anything that will not attract more customers and maybe deter them from coming in the salon."
But even at three percent or less, swipe fees are big money for small businesses. At the Tucson Hispanic Chamber of Commerce, Lea Marquez Peterson says for many businesses swipe fees are the number three expense after payroll and rent, so some businesses may feel they need to let customers pay for the fees.
Marquez-Peterson says, "Ultimately, the small business community is suffering. I mean, they're coming out of this tough economic downturn and these fees play a big part of that so I thing each retailer certainly has a tough decision to make."
A judge still has to sign off on the settlement but no one's suggesting that won't happen. Safeway says it has no formal comment for the moment. Fry's says it's looking for ways to save consumers money. The settlement does call for fees to drop for eight months then they could go back up.
There's a chance some companies would offer cash discounts but that basically means the credit fees would continue to be built into what credit users pay.