If you’ve been shopping with your credit card lately, you might have noticed a new fee on your receipt.
Last week, a number of businesses around the country – including merchants and retailers here in Wisconsin – began charging a checkout fee to consumers who use their credit card to make purchases. The fee is part of multi-billion dollar settlement between credit card issuers and merchants over recovering the costs of processing credit card transactions.
Merchants and retailers were allowed to begin charging the fee Jan. 27 in the 40 states where it is legal, including Wisconsin. While checkout fees may not have prominently appeared in the Fox Valley yet, there are 3 things you as a consumer should be aware of:
- The fees are optional. Merchants are not required to charge the fee, and in fact, many large retailers including Walmart, Target and McDonald’s have said they won’t add the fee to credit card purchases. Merchants that choose to charge the fee must tell you so by posting notices in the store, on their websites for online retailing and providing a detailed description on your receipt.
- The fees are limited. Most checkout fees are expected to range from 1.5% to 3% of the total purchase you make using a credit card, and cannot exceed 4%. But they can add up. If you make a $100 purchase using your credit card, you could see an additional fee of $1.50 to $3 on your receipt. That fee applies each time you use the card. If you charge $1,000 a year with your credit cards, you could be paying an additional $30 in checkout fees.
- The fees are avoidable. There are a lot of ways you can avoid the checkout fee. Certainly, you can avoid them by shopping at stores that don’t charge the fee. If you do all your shopping with cash, you won’t have to worry about the fees. Also, consider using your debit card or check card. The settlement doesn’t apply to debit cards or check cards such as those FNB-Fox Valley issues to its FREEdomFirst and ADDvantageFirst checking account customers.
How often you’ll run into these checkout fees is still a bit of an unknown. While retailers and merchants have won the right the charge them, price pressures may keep many from actually imposing them. Still, consumers should be prepared to see them and know their options.
To learn more about a how an FNB-Fox Valley check card can help you avoid checkout fees, visit with the experts on their retail banking team.