Illegal credit card surcharges by restaurants in California

This is an unofficial transcript of a special report by KTVU News.

First aired on July 5, 2009 at 5:44 PM.

Gasia Mikaelian: Have you ever had a merchant add a surcharge to your bill because you used a credit card or tell you that you had to make a minimum purchase to use your card? As KTVU's consumer editor, Tom Vacar, reports, both practices violate their credit card agreements and can be reported to the credit card company.

Tom Vacar: At this Oakland (Tijuana Mexican Seafood Restaurant) restaurant, our lunch bill was $24.10. But the register slip was $.60 more. The waitress said it was a fee for using my VISA credit card.

Tom Vacar: This San Leandro pizzeria (sign for Porky's Pizza Palace) charges $.50 more for a credit card purchase and this (sign for Papa Pancho's) San Lorenzo restaurant adds a buck to your bill if you use a debit or credit card. Consumers we met don't like the add-ons.

Carl Horn (credit card user): It doesn't make any sense. You should take whatever I'm willing to spend with you and you shouldn't add any additional fees for using a certain type of transaction. It makes no sense at all.

Kathleen Meagher (credit card user): I might be more likely to make a purchase with my credit card so I'm not sure that I should have to pay for that.

Nick Johnson (credit card user): Well, what goes through my mind is then basically whether that's not legal so that's what I understand.

Tom Vacar: San Francisco-based credit card company VISA International says he's right.

Jason Alderman (VISA International): VISA rules are very clear on this. Retailers are not allowed to impose any kind of surcharge for using a VISA card, credit card, debit card, or prepaid card. It's a form of payments discrimination.

Tom Vacar: Consumers Union says surcharges are illegal under California law regardless of credit card company.

Lauren Zeichner-Bowne (VISA International): California law prohibits the use of a surcharge in the case of using a credit card.

Rosie Martinez (credit card user): They know that's illegal but they know that we don't know that they're not suppose to charge.

Tom Vacar: Now what is allowed is what this Danville Valero dealer does: offer two prices, a credit price and a cash discount price. In the year since he's offered a lower cash price than the credit price, 30 percent of his customers now pay in cash.

Shawn Zomorrodi (Valero dealer, Danville, CA): So I decided to give the processing fee back to the customers. If they pay cash, they save it.

Tom Vacar: What about a merchant who won't allow a credit or debit card below a certain amount such as $5 or $10.

Jason Alderman: They can't impose a minimum. They can't impose a maximum. They have to be able to take your card for whatever that purchase is.

Carl Horn: I've agreed to so many of these fees so many times. I mean, you act like if you don't agree to the fee then you can't buy anything so what are we going to do?

Tom Vacar: If you report such conduct to your credit card company, they say they'll put a stop to it.

Lauren Zeichner-Bowne: The more consumers that go in to make a merchant aware of this, the more likely they'll change their practices.

Tom Vacar: In fact, when I complained to the (Tijuana Mexican Seafood Restaurant) restaurant that added the $.60 surcharge to my lunch bill, they gave me the money back. I'm consumer editor, Tom Vacar, KTVU Channel 2 News.

Category:

Nonprofits & Activism

Tags:

• unfair
• illeg

[janefisher2000]

If a store have sign of min. purchased then carry some cash instead of buying $3 milk and used your credit card. Any body should have some money on them. U r a fucking waste

[ItsSeanish]

I take it from you comment that you probably don't own any credit cards due to bad credit. Too bad for you!!! LOL. Get a job and get a clue, LO$ER!!!

[cobaine87]

who cares, you americans are nothing but fat pigs your food is cheaper than anywhere in the world fucking fat red necks always complaining. CANADA for the win US land of the stupid and fat ppl on old ppl scooters.

[YourDadsYourUncle34]

@ItsSeanish

Fuck you , you dumb sack of Jews.

[esubadog]

This is illegal and immoral. Fees and minimum purchases are taking money away from consumers. Protect the consumers! If a business can't afford fee's of a credit card machine, then go cash only.

It's not the consumers responsibility to keep someone in business.