Tuesday, January 29, 2013

Credit card rule changes: More to surcharging than meets the eye

Visa and MasterCard are sounding the alarm that America’s businesses are going to start tacking on millions of dollars in surcharges in coming months for guests who pay by credit card.

But the National Restaurant Association thinks that’s a tactic to draw attention away from the real issue: The fact that card companies have a stranglehold on merchant swipe fees and don’t want American consumers to know that they’re already paying billions of dollars in hidden swipe fees. These are fees that America’s small businesses can’t control or negotiate, and that keep climbing year after year.

In a narrow-margin business like restaurants, every penny counts. America’s nearly 1 million operators do their best every day to keep prices low and value high for their guests.

Few restaurant guests know that card fees are one of the five fastest-growing expenses for restaurants, even as technology brings down the costs of processing. These costs get passed along to everyone who dines at a restaurant.

The NRA hasn't seen signs that many restaurants are looking at surcharges in the wake of recent rule changes from Visa and MasterCard allowing such charges. (But if you’re a restaurateur thinking about surcharges, here’s a caution: The card companies’ new rules that took effect Jan. 27 are complicated.
Know the fine print before you move forward.)

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