Will Retailers Start Charging For The Privilege Of Paying With Plastic?

Your morning latte may be getting more expensive. No, the coffee shop isn't raising their prices, but they may start charging you an extra fee if you plan on paying with your credit card.

It's just the latest tactic allowed by retailers who don't appreciate $1 purchases paid for with Visa and MasterCard. Back in 2010, Congress gave businesses its blessing to impose $10 minimums for credit card transactions. Now, a class action lawsuit is going a step further and saying merchants can pass along 'swipe fees' to their customers.

Everything you need to know about checkout fees

Swipe fees are the cost charged to retailers by credit card companies. Depending on the transaction, card issuing banks have been able to assess a 1.5-3 percent fee to merchants in exchange for processing a credit payment.

Previously, retailers had to eat this cost. However, 19 businesses, including big names such as Kroger and Target, brought a class-action lawsuit in 2005 against credit card companies and issuing banks to force a change to swipe fee policies. Earlier in 2012, the courts came to a settlement that allows merchants to pass along swipe fees to their customers in the form of checkout fees.

Here's the skinny on the checkout fees that may debut this month:
  • Checkout fees can only apply to transactions made with credit cards and not debit cards.
  • Retailers charging checkout fees must clearly disclose them at the store entrance, at the point of sale and on receipts. Online merchants must also clearly disclose the fees on their website.
  • The fee cannot be more than the actual cost incurred by a retailer to accept a credit card payment, typically between 1.5 and 3 percent of the purchase price.

Fortunately, if you are lucky enough to live in one of these states, you don't have to worry about checkout fees: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.