Retailers may charge fee to customers paying with credit cards

Even if retailers wanted to charge credit card users more, it would require some work, the retail federation said. For example, surcharges differ depending on the type of card. Merchants are required to disclose the fee on receipts, which means they would have to reprogram their registers to determine the swipe fee charged for a particular card.

Not everyone is unhappy about checkout fees, however.

Ed Mierzwinski, a consumer advocate with U.S. Public Interest Research Group, said he favors card surcharges because they give retailers some leverage to prevent swipe fees from rising rapidly. If swipe fees get too steep, he said, retailers can threaten to add a surcharge, which ultimately would cause consumers to use credit cards less and reduce the income of banks and payment networks.

Swipe fees have long been unfair to customers who pay with cash, Mierzwinski added. Retailers recover the cost of credit card processing fees by raising prices on all customers, he explained.

Banks, meanwhile, use swipe fee revenue to pay for credit card reward programs, he said. So lower-income consumers who pay with cash end up shelling out more for goods and services to finance reward programs, Mierzwinski said.

"Those are the people that need to be protected, more than somebody with an airline credit card," he said.

While merchants say they won't charge the fee, that could change.

When Australia started allowing merchants to collect such a fee in 2003, retailers were slow to do so, according to the Electronic Payments Coalition. Seven years later, nearly 30 percent of merchants charged a fee on at least one card, the group said.

It might never reach that point in Maryland, where the legislature is considering a ban on checkout fees.

Del. Kathy Szeliga, a Republican representing Baltimore and Harford counties, sponsored one of two bills in the House to prohibit such surcharges. She said this is needed to protect consumers in the event swipe fees go up, prompting merchants to pass on the costs.

If surcharges do come to Maryland, consumers can take steps to avoid the fee.

Retailers that assess the fee must post a disclosure near their entrance, at the register and on customer receipts, said Ruth Susswein, an advocate with Consumer Action. This gives card users a heads-up that they might want to shop elsewhere.

Online shoppers, however, probably won't see the disclosure until checkout, when they are far along in the process, Susswein warned.

The consumer group suggests that customers ask for a discount on the surcharge if they believe a retailer has increased the price of goods and services to cover swipe fees.

Another way to avoid the fee is to pay with cash or a debit card. But that's not easy for most consumers buying big-ticket items.

Sonny Morstein, owner of Morstein's Jewelers in Baltimore's Federal Hill neighborhood, said credit card payments account for at least three-quarters of his sales.

"You've got to be crazy to discourage that. We would never consider it," Morstein said of surcharges. "Unless everyone does it, nobody will do it."

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