Walmart, Target Among Chains Saying No to Credit-Card Use Fees for Now

Walmart, Target Among Chains Saying No to Credit-Card Use Fees for NowFor now, U.S. consumers don’t have to worry about the big retail chains adding a surcharge for credit card purchases, despite a settlement with Visa, MasterCard and the banks that allow them to do so.
Whether small businesses will opt to charge customers extra for using credit cards is uncertain, although all retailers are required to post signs explaining the new policy if they do.
The so-called “checkout fee” option became effective Sunday, for either in-store or online credit card purchases.
Bloomberg reports that Walmart, Target and Macy’s have said they will not initiate the fees.
Wal-Mart, the world’s largest retailer, has no plans to start the fee, a spokesman said.
“The proposed modification to the no-surcharging rule for Visa and MasterCard provides no benefit to customers or merchants such as Walmart,” Randy Hargrove, a spokesman for Walmart, told Bloomberg.
Spokespeople for Target, the second-largest U.S. discounter, and Macy’s, the second-largest U.S. department-store chain, also told Bloomberg that they won’t initiate a checkout fee.
Sears, the largest U.S. department-store chain, also has no plans to issue the fees. J.C. Penney Co. didn’t respond to an e-mail from Bloomberg seeking comment.
However, a spokesman for Kroger Co., the largest U.S. grocery-store company, declined to say whether it would start levying the checkout fees, Bloomberg said.
Last summer, Visa, MasterCard and some of the top U.S. banks reached a $7.25 billion settlement on behalf of about seven million U.S. merchants who charged price-fixing among the issuers of credit cards and debit cards.
The price-fixing allegations are tied to the fees imposed on merchants by the card networks and the banks for credit card transactions – a fee is typically 1.5 percent to 3 percent of the entire purchase.
The $7.25 billion amounts to a two-phase payment for alleged past damages of $6.05 billion up front, and a further payment representing the value to merchants of a temporary reduction in the level of the so-called interchange “swipe” fees.
A final ruling on the settlement will be made later this year, so further modifications are possible.
Walmart and many large retailers have joined the National Retail Federation in opposing the settlement, claiming it does not go far enough in restricting the payment networks from raising fees. And it forces retailers to waive their rights in seeking further legal challenges.
“The proposed settlement would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year,” Walmart said in a statement last year. “The proposed settlement would require merchants to broadly waive their rights to take action against the credit card networks for detrimental conduct or acts.”
The checkout fee cannot be implemented in the 10 states where such surcharges are prohibited, including California, Florida, New York and Texas. American Express wasn’t part of the settlement.
Here’s a good overview of the new “checkout fees” from the Electronic Payments Coalition.

One thought on “Walmart, Target Among Chains Saying No to Credit-Card Use Fees for Now

  • January 29, 2013 at 2:53 pm
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    My Daughter, who lives in Riverton, WY has told me that their local Walmart IS charging for credit card use – so what gives?

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