Consumer Alert

Can sub shop really impose unappetizing credit card fee?

By Mitch Lipka
Globe Correspondent / July 19, 2009
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Q. For years, I have eaten lunch daily at a local sub shop with co-workers. We spend an average of $30 to $40 dollars per week. The other day, I went in there by myself and ordered a salad and cold drink and put the charges on my Visa card. I then questioned the owner about a 30-cent extra charge that was placed on my Visa. His policy is that any credit card order under $10 dollars gets charged the extra 30 cents. He does have a very small sticky paper on the cash register stating this charge. Is this charge legal?

Chuck Mabardy

A. You are right to raise your hackles about this, even if it’s only 30 cents. By accepting cards, the merchant had to sign an agreement prohibiting surcharges or limits on their use. At least around here, it’s also forbidden by state law.

Massachusetts is among 10 states outlawing surcharges. Connecticut and Maine also do. That means not even a little sticky or an actual sign can make it OK.

Visa and Mastercard also make it plain to companies that accept their cards that they are not to charge card users extra. American Express does not have the same rules - unless Visa or Mastercard are also accepted. It is also not OK with credit card issuers to set minimums for credit card use (the merchant runs the risk of losing the right to process credit card transactions).

In businesses, such as gas stations, that do a high volume of credit card transactions - and have to pay the fees associated with them - there is an option to offer discounts for customers who pay with cash. It’s OK to offer a discount to cash customers, but not OK to charge more for using a credit card.

So, you’re right. Now, the question is do you want to get into it with the store owner? Are you ready to file a complaint with Visa? The attorney general?

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