can small businesses charge you a extra percent of the bill because you use a credit card verses cash?

Question

Have used my credit card at different places and they want to charge 3-4% more on the bill because I didn't pay cash,and they told me that if I used cash they wouldn't charge this extra but that the credit card people charge them. My wife and I have had small businesses in the past and never charged people to use there credit cards as to me that is part of doing business and that is for my tax people to figure out at tax time. Also by accepting credit cards we figured that it increased our business. I can remember when Master Card was first on the market We were told we could not pass this charge on to the customers as against the law because that was one of the obsticals for them to convince businesses to take on there card.
It just seems to me that this is becoming a more excepted practice and I would like to know what can be done if this is against the law?
thanks DG

Answer 1

It is against Visa and Mastercards regulations to charge more for using a Credit Card however they can offer you a discount for using Cash so it is a little of a gray area. Next time this happens just let the store know that you are aware of this regulation if they still want to charge you call Visa they will take care of it.

Answer 2

Well I think it is legal because you're suppose to tell the customer about the charge before you do the transaction. I've been to smaller businesses that do charge a small fee. For example I paid an extra 2.50 to stay at a small hotel when I paid by credit card.

Answer 3

Visa and MasterCard prohibit surcharges, and American Express discourages them (and prohibits them if the merchant also takes Visa or MasterCard). In the U.S. it hasn't been illegal to surcharge a credit card since the 1980s but some states have introduced laws banning the practice. Here is a list of some that do: http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html#MORE:B

In Europe, the practice is mostly illegal.

Answer 4

The practice violates their merchant agreement. You can call the Visa/Mastercard 800 number and turn them in. You won't get your money back but they could lose the privilege of accepting Visa/Mastercard.