Consumers be aware!

Introduction

In May 2021, I wrote an article about the surcharge fees that merchants are charging consumers because they are using their credit cards to purchase goods and services. This practice continues to take place in the Turks and Caicos Islands. In fact, it has escalated and is becoming out of hand without any consequences.

This practice violates the agreement merchants have with their credit card providers. Merchants, banks, and credit card companies have established that consumers will be charged the displayed price for goods and services without any additional surcharges.  Some merchants also now require a minimum purchase to use credit cards. This practice is also a violation.

I urge merchants to stop this unfair practice, and I encourage consumers to report it to financial institutions or avoid businesses that charge such fees.

A surcharge fee is a form of discrimination.

A surcharge fee is the fee that the merchants charge consumers on top of the cost of the item or service.  Merchants should review their pricing and include a fee, just as they do with duty and freight. In this way, the consumer is being charged what the price is stated. Some may argue and say what is the difference.  There is a big difference. Everyone, including cash-paying customers, will pay the same price if all charges are included. It is unfair to discriminate against consumers who are using credit cards. We aim for a cashless society, so consumers shouldn’t be penalized for using credit cards. 

Minimum charge is also a form of discrimination.

Some places require a minimum purchase to use credit cards. This is not right. A former bank manager once told me he was shocked when he heard a cashier at a popular grocery store tell a customer they had to spend a minimum amount. The percentage that credit card companies charge remains the same, regardless of the price of the good or service. If you spend $1, the rate is 3% and if you spend $1,000, the rate is 3%.

The manager said he went immediately to the general manager of the establishment and reminded them of their agreement and since then they have discontinued that practice.

Benefits of using a credit card

Using a credit card can be very beneficial to both the consumer and the merchant. The use of credit cards also helps to heighten security. If criminals are aware that businesses are only taking credit cards, it may reduce the chances of a business being robbed because there will be no cash.  Businesses ought to realize that due to the excessive use of credit cards, their sales may increase. When someone has cash and the cash is used up, they cannot spend anything else but when you have a credit card and you have a good limit, consumers will be tempted to spend more.

Card Association Prohibition – Contract Addendum

All merchants signed an addendum listing specific prohibitions. Included in this addendum it clearly stated that “merchant is prohibited from adding any surcharge to transactions.”

Recommendations

Financial institutions should enforce agreements with merchants and penalize or interrupt credit facilities for persistent violations.

Parliamentarians should pass legislation to make this practice illegal in the TCI. Apparently, there is no legislation in place except for the agreements that exist among the credit card companies and the merchants.

Conclusion

Research indicates that in the United States, most states (with the exception of four) permit the imposition of surcharges. Perhaps that is why some merchants are doing the same thing in TCI. However, the legality of an action in the USA does not necessarily imply its legality in TCI. Merchants know these actions might breach their agreements.

I do not want to hurt anyone’s business but right is right and wrong is wrong.  I do not use my credit card at any establishment that charges a surcharge or requires a minimum spent. I will use cash or take my business elsewhere. Others need to do the same thing and just maybe it may force some of the merchants to discontinue this practice.