Legal Question in Business Law in California

Re: Credit Card Service Charges

Of course, the government is not required to live by that law. If you try to pay your DMV license on line, you are charged a premium. Likewise (at least in Contra Costa county) trying to pay your property tax by credit card requires that you pay a surcharge.

Interesting, isn't it.

Re: Credit Card Service Charges

In addition to the state law provisions identified by the other attorneys, credit card issuer agreements with retailers may also prevent surcharges.

E.g., from the VISA corporate website,

"[Q] Can merchants set a minimum purchase or charge me a fee for accepting my Visa card?

[A] Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge you a fee when you want to use your Visa card.

If you run into a problem like this with a merchant, please notify the financial institution that issued you your Visa card. These institutions have access to the appropriate Visa rules and regulations and can help you document and file your complaint. You'll find their address and/or telephone number on your Visa statement. Their telephone number may also appear on the back of the card itself."

http://www.usa.visa.com/personal/about_visa/contact_us.html?it=ss_/index.html#d

Re: Credit Card Service Charges

Thanks for the laugh Ben...I can just picture the argument between them now.

Re: Credit Card Service Charges

The law is a little more complex than one might expect. California Civil Code section 1748.1(a) says:

"No retailer in any sales, service or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means. A retailer may, however, offer discounts for the purpose of inducing payment by cash, check or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers."

(Additional sections of the law make related provisions).

Now, I ask you, what is the practical difference between making a surcharge, on the one hand, and refusing to give a discount, on the other? It seems to me that this law is toothless. One way or another, the cash buyer can come out ahead.

Re: Credit Card Service Charges

I agree with Mr. Whipple that, in theory, there is no difference between giving a discount to the cash-buyer or imposing a surcharge on the customer who uses the credit card.

However, when a good or service is offered for a fixed price, the merchant must honor that price for a consumer wishing to pay by credit card. If he wants to lower the price for a cash-paying customer, that's fine.

In other words, if all merchants that seek to charge more for using a visa were aware of the code section cited by Mr. Whippple, they'd likely increase the price of all goods/services and post a sign that says "discount of X given for consumers who pay cash." Unless a merchant has such a policy in place, you should (in theory!) have some luck in evading that attempted surcharge.

Now good luck pulling the statute out of your pocket and convincing some apathetic clerk to disobey the owner's instructions and to give you the regular price as you slide your Discover card across the counter.