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Ray
Ray, Lawyer
Category: Legal
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Experience:  30 years in civil, probate, real estate, elder law
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I am a merchant in az and need the state statute reference

Customer Question

I am a merchant in az and need the state statute reference for not being allowed to charge a customer who is paying for services with a credit card more money to cover the credit card fee. once i am able to read that statute (or chat with someone about the statute) then i have a follow up question concerning another situation regarding covering credit card fees for members of an art coop.
Submitted: 7 months ago.
Category: Legal
Expert:  Ray replied 7 months ago.

Hi and welcome to JA. Ray here to help you today.Arizona allows for such checkout fees to be applied.Here is the latest article and the states where it is now allowed.

http://www.ibtimes.com/new-credit-card-transaction-fees-list-states-charging-4-surcharge-checkout-fee-1042384

This allows such fees in Arizona , you would be allowed to charge these, please let me know if you have more follow up.

Expert:  Ray replied 7 months ago.

What the heck is a surcharge? A surcharge (also known as a checkout fee), not to be confused with a convenience fee, is a charge added to a transaction based on the whole amount charged to a credit card. Merchants cannot turn a profit on surcharges as there are rules in place surrounding the practice based on a class action law suit brought forward by some retailers in 2005. Starting on January 27, 2013:

  • Surcharging debit or prepaid cards is not allowed on transactions proceed on Visa and MasterCard owned networks (flip over your debit card to see if there is a network logo).
  • Surcharging a debit card processed as credit is not allowed, if the debit card falls under one of the protected networks
  • Surcharge should be the discount fee merchants pay per transaction, or less
  • Surcharge fees must not exceed 4% (even if the merchant discount fee is higher than 4%)
  • Merchants that assess a surcharge must disclose this at the point-of-sale and at online checkouts AND on receipts
  • Surcharging is prohibited in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Minnesota, New York, Oklahoma and Texas
  • Any refunds must include surcharge fees (even partial refunds warrant a partial surcharge fee refund)
Customer: replied 7 months ago.
2nd part has to do with coop members being able to pay their space rent with a credit card (unusual situation) and the coop's ability to charge them the cc fee in addition to their rent.since this article is dated 2013 -- has the az legislature created another law to not allow for surcharge/checkout fees??
Expert:  Ray replied 7 months ago.

No it has not been outlawed.

Another reference.

http://www.abc15.com/news/national/credit-card-charge-merchants-accepting-mastercard-visa-can-now-add-surcharge-to-customer-bills

You need to include it on your billing and post sign that you charge up to 4% surcharge fees for payment with credit cards.And here it has to be your actual cost, you cannot charge more than your cost or 4% here.

Expert:  Ray replied 7 months ago.

Here is a great q/a that goes through notice requirements and how to set this up.

https://usa.visa.com/dam/VCOM/download/merchants/surcharging-faq-by-merchants.pdf

Thanks again for the chance to help today.

Customer: replied 7 months ago.
i understand that some states allow to directly pass on cc fees but az does not -- how to get i the az law that prohibits directly passing on the cc fee (not this surcharge/checkout fee) i tried the state website but couldn't figure out where to look and their search engine was no help
Expert:  Ray replied 7 months ago.

So let me be clear you are wanting to charge a processing fee, the one for your costs you are charged by the card company, that would be considered a checkout fee.It's what the card company charges you as a percentage to process charges for members that charge your fees to your company for services.It is legal to charge such fees, I am not understanding if a bank told you otherwise.You have to post notice of the fees, you cannot charge more than 4% but they are legal in Arizona and 39 other states.There are only ten states where they are outlawed.

Expert:  Ray replied 7 months ago.

The credit card merchant fee here, what visa/mastercard charge you to process the charges is a checkout fee that you are allowed to properly pass on as I set out above.Has someone here told you otherwise??

Expert:  Ray replied 7 months ago.

More reference at bottom each card has their rules but the bot***** *****ne is check out fees, surcharges, etc legal in Arizona as long as you follow the rules about signage and limits on fees.

https://www.cardfellow.com/charging-customers-a-credit-card-convenience-fee-at-check-out/

Thanks again for the chance to help you.

Customer: replied 7 months ago.
surcharge/checkout terminology was not mentioned by the bank -- they told me i could not get reimbursed for the cc fee by the customer ----it also seems from reading the info you linked me to that these surcharge/checkout fees only apply to MC and visa and not to debit cards --correct?
Expert:  Ray replied 7 months ago.

Yes credit card fees are ok , you cannot charge a fee for debit cards.They are apples and oranges.MC, Visa, American Express all ok.That may be why bank told you no on debit only cards.

Thanks again.

Expert:  Ray replied 7 months ago.

You would be able to charge a check out fee for anyone using a credit card under the rules set out by cardholder here in Arizona.

Customer: replied 7 months ago.
ok i think i get it now -- thanks this was worth the money paid -- thanks
Expert:  Ray replied 7 months ago.

You are so welcome.

If you can positive rate it is much appreciated.

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