U.S. retailers may shy away from charging consumers extra to use credit cards, even though they are free to do so under a proposed legal settlement, because of intense competition in the industry.
Wal-Mart Stores Inc. (WMT), Target Corp. (TGT) and Macy’s Inc. (M) are among chains that have said they don’t plan to place fees on purchases made with credit cards using the Visa Inc. (V) and MasterCard Inc. (MA) payment networks.
Surcharging became an option for merchants that use those networks on Jan. 27 as part of a proposed lawsuit settlement that Visa, MasterCard and some of the biggest U.S. banks reached with retailers in July. The change will not supersede laws in 10 states, including California, Florida, New York and Texas, that limit the fees. American Express Co. (AXP) wasn’t part of the deal.
“We fully expect most retailers won’t surcharge credit cards with the abundance of alternatives available to consumers,” said Joe Ridout, a San Francisco-based spokesman for Consumer Action, a nonprofit group focused on consumer rights. Smaller, independent stores may be more willing to levy the fees because they pay higher charges to banks for credit card transactions and don’t have the bargaining power to negotiate lower ones, Ridout said.
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