[CAFR-Contacts-News] Credit Card Surcharge - New Comp Object 4735

[ROSS Kathryn * CFO]

Hello Everyone!

Many of you may have read recent articles about the new credit card "surcharge."

The surcharge is the result of the biggest anti-trust settlement in U.S. history. In 2005, a group of merchants claimed that MasterCard, Visa, and nine other companies including JP Morgan Chase conspired to fix the fees that stores pay to accept credit card purchases. After years of negotiations, the case, which was in the U.S. District Court for the Eastern District of New York, settled. The credit card companies and banks agreed to pay $6 billion to the merchants who sued.

As part of the settlement, merchants are now allowed to charge customers a fee equal to the cost of accepting cards, typically 1.5 percent to 3 percent of the purchase price. This new provision became effective January 27, 2013.
Merchants are not required to charge customers this new fee.  However, if agencies are charged the additional fee when using their SPOTS cards to pay for goods and services, we want to capture the surcharge separately. Therefore, SFMS and SARS have established a new comptroller object for this purpose.


*         4735 - Credit Card Surcharges:  A credit card surcharge, also known as a checkout fee, is an additional fee that a vendor may add to the bill when an agency uses a credit card to pay for goods or services.



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Here are some additional items to consider:
1.    The merchant must provide clear disclosure of the surcharge to buyers at the point of interaction and, if a purchase occurs, on the receipt.
2.    A surcharge cannot exceed 4%.

3.    It is currently prohibited by law in 10 states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas).

Thank you,
Kathy

Kathryn Ross, CPA
Manager, Statewide Accounting & Reporting Services
Chief Financial Office
Department of Administrative Services
155 Cottage Street NE, U-50
Salem, OR 97301
Phone:  (503) 373-0265
Fax:  (503) 378-3514
http://oregon.gov/DAS/CFO/SARS<http://oregon.gov/DAS/SCD/SARS>

Data Classification: Level 1 - Published

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