# Key Post: Surcharge for using credit card



## ClubMan (17 Jun 2003)

Levy charged by Thompson Travel compnay. Original query by Garryks

_"You may also pay with the following credit cards [VISA, MasterCard, EuroCard]. Due to the fee levied by credit card companies, a 1.5% credit card charge on payments by Visa, Mastercard or Eurocard will be made for holidays departing before the end of March 2004 and a 2% credit card charge will apply for holidays with a departure date on or later than 1st April 2004."_


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## Slash (17 Jun 2003)

We came across similar practice when booking this year's holiday.

The travel agent told us if we paid by credit card they would charge us 2% extra, whereas if we paid by cheque, the 2% would not apply.

Several years ago, a restaurant in Italy charged extra (can't remember how much) for using an Amex card. On returning home, I reported it to Amex, and they refunded the surcharge to me.


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## rainyday (17 Jun 2003)

Hi Garry - Note that credit card companies charge outlets a fee of 3% to 5% for each transaction. So if you buy a €100 jumper in BT, they will get approx. €97 euro from the cc company for that transaction, and will pocket the €3 themselves. This is how they fund the 56-day free credit period and the basic operation of your card.

The travel agent have levied the extra fee to compensate themselves for this deduction. 

I did hear stories some time back that these extra charges breached the terms of the 'merchant agreement' between the outlet and the cc companies, but I've never been able to get hard confirmation of this.


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## garryks (17 Jun 2003)

*Credit Card Levy charged by travel company*

Hi,

I've booked a holiday with Thompson. One of the charges is a "credit card levy" as I booked over the phone. In total this levy amounts to Â£20.28 stg.

Anybody what this is for and why I am paying it? I asked the booking rep booked got a very garbled unconvincing answer.

Thanks.


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## john6999 (18 Jun 2003)

*credit card*

I can confirm in my merchant agreement (BOI credit card services) that it is not permitted to charge the customer extra to use a credit card form of payment over any other. 

But the transaction % depends on the volume put through the CC machine...more volume=lower %

My volume would be quite small and the fee is 1.5% and .14c for debit cards. To be honest rainyday, 3-5% sounds way too high but may have been the case many years ago.


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## rainyday (18 Jun 2003)

*Re: credit card*

Thanks John - Very useful info.


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## garrettod (18 Jun 2003)

*...*

Hi,

Is this the same logic that Ryanair use for charging us a fiver a go, or whatever their current charge is for paying by credit card ?

.... not that I've seen many other options for paying Ryanair, when booking via the internet for their "cheapest fairs" :rolleye:

regards

G>


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## Elcato (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*

I also went to pay for ski-ing lessons in Italy earlier in the year and they told me it would be an extra €5 if I paid by credit card. Are you guys saying this is illegal or is it down to the particular agent who gives you your visa card ?


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## Tommy (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*

My travel agent charges a surcharge for flights or holidays booked by credit card but this can be avoided by paying by laser card instead. They don't charge any such fee for laser transactions.


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## ClubMan (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*

Yes - in relation to the original query  don't levy a surcharge for non credit card payment but they only seem to accept _Delta_ and _Swift_ which I presume are UK specific debit cards?


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## rainyday (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*



> Are you guys saying this is illegal or is it down to the particular agent who gives you your visa card ?



It's really down to the agreement between the agent and their credit card merchant services provider.


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## Moneybags (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*

This issue was addressed by the Director of Consumer Affairs in her annual report for 2002:



> In the course of the year ODCA received a number of complaints from credit cardholders who had surcharges imposed on them when paying for goods/services by credit card. The complainants maintained that such charges would not have been imposed if they had paid by other means e.g. cash or cheque.





> Whilst the practice of surcharging by merchants is not illegal, ODCA is aware that the rules of a number of payment card schemes, including Visa, Mastercard and Laser, specifically prohibit merchants from imposing fees or charges on customers paying for goods or services by credit/debit card where such fees or charges would not be imposed if the customers made payment in some other form.





> It is disturbing that, despite the existence of these no discrimination rules, the practice of merchant surcharging continues and indeed is particularly prevalent in certain sectors. ODCA met with the trade association of those issuing cards to consumers and those who acquire merchants for the purpose of accepting payment by card, to remind them of their responsibilities to ensure that cardholders are not discriminated against in using their cards when paying for goods and services. The Director has asked the card companies to conduct an audit of their acquired merchants to ensure that they comply with the no discrimination rules of the card payment schemes.


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## ClubMan (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*

Again in relation to the original query, based on [broken link removed] I presume that the _ODCA_ has no remit/interest in such disputes with retailers (online in this case) outside the state and the case would need to be taken to the European Consumer Centre?


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## Tommy (18 Jun 2003)

*Re: ...Is it illegal to ask for more ??*

Personally, I would much prefer to deal with (optional) credit card surcharges than 

(1) to have selling prices bumped up by an equivalent amount to absorb the credit card company's cut regardless of whether or not I use a credit card - wouldn't it be lovely if petrol retailers could drop their prices by 3-5% for cash or laser sales?? 

(2) have outlets such as Lidl refuse to accept credit cards altogether because they feel they are not in a position to pass the cost onto consumers.

On condition that consumers are advised of any surcharge before they decide on how to pay, I cannot see any problem.


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## john6999 (18 Jun 2003)

*credit card*

(2) have outlets such as Lidl refuse to accept credit cards altogether because they feel they are not in a position to pass the cost onto consumers.

perhaps another reason they don't accept credit cards is the potential exposure to fraudulent use of cards when under the shops limit and the claw back that can occur many months after the transaction, if the customer disputes it. 
In any case its just not in Lidl's business model, they want immediate payment every day (no processing delays) and no transaction disputes later on. Who can beat money in the till ?


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## Tommy (18 Jun 2003)

*Re: credit card*

Good points, John. They do accept Laser cards but they do not provide cashback on Laser.


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## Joe123 (23 Jun 2003)

*Credit Card*

Tommy, in relation to ur last point, I wasnt aware that someone could accept laser and not give cash cash back.  I thought that was one of the laser conditions.  Maybe someone from a bank or a shop that does accept laser could confirm or deny this.  I am interested as there is a Lidl store currently being built near to me.


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## rainyday (23 Jun 2003)

*Re: Credit Card*

Interesting to note that [broken link removed] payments for their flights.


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## ClubMan (23 Jun 2003)

*Re: Credit Card*

Yesterday's _Sunday Tribune_ had a piece about the _Ryanair/Amex_ issue and about credit card transaction levies generally. The gist was that retailer enforced levies on CC payment may not be in breach of the merchant agreement rules if they also apply to other forms of payment (basically such agreements generally stipulate that CC payments should not be penalised relative to other payment mechanisms). However I guess when they are charged they are only charged on CC payments. It also gave the impression that whatever about such levies possibly being in breach of the merchant agreements they are not generally illegal.


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