Jun 7, 2006

Ruling in Europe encourages credit card surcharges

European courts are finding that retailers should be allowed to charge a fee for accepting payment cards. A couple of weeks ago, the Supreme Court in Prague ruled that a hotel did not violate the law when charging clients a 3 percent surcharge on card payments. Check out the Prague Post article here.

"Payments in cash and via payment cards are not the same," a court spokeswoman said after the ruling. “Credit card use is not a right. There is in fact no legal requirement that businesses are obliged to accept payments via cards."

The chairman of the Association of Small and Midsize Entrepreneurs seems pleased, and probably relieved. He believes that the ruling "will enable many small businesses to eliminate additional costs related to accepting payment cards. So far, [businesses] were forced to follow the dictate of banks and payment card system providers, and they were discriminated against by major retailers who enjoyed much softer conditions."

The Prague Post reports that many smaller retailers, along with major discount chains like Lidl and Kaufland, have opted not to accept cards, while others offer up to a 5 percent discount to customers willing to hand over cash.

If customers get angry about being charged more for using their card, most of us have always assumed that they would get angry with the merchant, causing the merchant to drop the practice. This has pretty much been the case in the past. Now there is evidence that this might be changing. What happens if customers get angry with their bank instead? I'm still working on that blog post. I can't seem to find the time to get it done.

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