Credit Card Fees Could Increase Nationwide
January 28, 2013 9:26 PM
The 18th Amendment, a neighborhood bar in Sioux Falls, offers drinks, food and gambling and running an establishment like this comes with a price.
"The cost of business, especially for local owned small businesses has escalated," said Horrocks.
Rob Horrocks, the General Manager at the 18th Amendment said some of the costs include credit and debit card fees, which retailers pay banks to process card sales.
Now, a new law allows businesses to pass along those fees to consumers, reaching up to four percent in additional charges per transaction.
"We have to consider every option to make sure the establishment can make money," said Horrocks.
This might be an option now, but Horrocks said their neighborhood bar wouldn’t be taking any action soon.
"We're not going to be one of the first movers or anything," said Horrocks.
Some companies such as Paws & Reflect Pet Grooming eliminated credit cards and debit cards as a form of payment altogether which ended up saving the company money as well as their customers.
"When we explain to them that we're paying anywhere from $800-$1200 a month in finance charges, they get it,” said Biggins.
Jennifer Biggins, owner of Paws & Reflect Pet Grooming, said as of July 2012, their business only accepts cash or check.
Some customers such as Stephen Biteler and his dog Snowball accept the business's decision.
"I think it's a really good thing that way they're not going to have to raise their prices, just because they have to make up for that 4% and it helps me because I know my prices are going to stay the same," said Biteler.
Although Biggins doesn't think her business will be turning back to credit and debit cards anytime soon, she said this new law represents choices for small businesses.
"You have to always adapt to different laws, regulations, trends." said Biggins.
A choice many businesses will be making soon.
Just to point out this is not a new fee, but a new option for retailers to pass the cost on to consumers.
All indications are major retailers won't charge the so called "check out" fees, a Hy-Vee spokesman said they have no plans to start charging customers who use credit cards.
Individual states can ban the fees and ten states have already done that.