Joyce Kane of Oceanside calls it her pet peeve, and asks her credit card companies to refund the fees when merchants charge her without proper disclosure. According to the New York State Attorney General's Office, credit card surcharges are legal, but only if the prices posted on merchandise or menus are the higher amounts that must be paid by credit card users. NewsdayTV's Steve Langford reports.  Credit: Newsday/Howard Schnapp, Newsday file

For nearly three years, Joyce Kane, of Oceanside, has fought credit card surcharges — one disputed transaction at a time. 

She's recovered about $100 by making dozens of calls to the banks that issue her cards, contesting the 3% to 4% charge that many local businesses tack onto the lower cash-purchase rates they display.  Kane said she's not too concerned about the money, but dislikes the surcharges on principle and would like to see more consumers pressure banks and credit card companies to take action to stop them. 

"They want you to use it [the card]. They're offering you all these bonus miles," said Kane, who works in accounting for a doctor's office. "The credit card companies are so strong. Why aren't they fighting this and saying: No, these merchants have to pay the fee?"

A particularly challenging economic environment for small businesses has prompted more merchants to pass the cost of processing cards on to consumers, payment processing firms said. With each swipe, banks get an average of 1.3% to 3.3% of the transaction, and credit card networks earn an average of 5 to 10 cents, according to The Motley Fool, a personal finance publication.

What to know

  • Credit card surcharges are being added to the bill more frequently as businesses struggle with inflation and other challenges.
  • Swipe fees are permissible as long as the merchant posts the higher, credit card price in dollars-and-cents, according to state law.
  • Banks may issue refunds if consumers dispute these fees.
  • Inadequately disclosed surcharges can be referred to the state Division of Consumer Protection for mediation or to the state Attorney General's Office for enforcement.

Businesses can factor in these processing costs and charge more to consumers paying with plastic so long as they post the precise dollars-and-cents rates for those using cards. Newsday reported last month that many local companies skirt the state law by posting the lower cash prices and adding on extra fees when customers pull out their cards to pay. 

Kane said she first noticed a surcharge when buying pizza for her birthday celebration in December 2018. She complained to the state’s Division of Consumer Protection and state Attorney General’s Office. Someone working for the government recommended she call her bank, which ultimately refunded her for the surcharge. 

“That’s when I started,” she said. “It’s always $2 or $3; it’s never $0.79 — if it is, I don’t bother.”

She started looking for the so-called "convenience" fees, particularly at restaurants, bakeries and dry cleaning businesses. She saves receipts for any transactions with surcharges.

After two or three days pass and she's sure transactions have cleared, Kane informs the card-issuing bank what portion of the bill she wants to dispute. The bank then notifies her that she'll be credited for the full amount disputed and she files away the paperwork.

“I’ve got an envelope full,” said Kane, who has convinced a few friends and relatives to follow her example.

Consumer advocates are divided on the effectiveness of disputing surcharges with banks. Contacting the bank is the right thing to do, according to John Breyault, vice president of public policy telecommunications and fraud at the National Consumers League, which provides government and businesses with consumer perspectives. He said credit card holders often have no or limited liability for fraudulent charges, a category that banks may determine includes improperly disclosed surcharges. 

But banks are not likely to have any obligation to ensure merchants follow the rules, which are set up by credit card networks such as Mastercard and Visa, according to Ira Rheingold, executive director of the National Association of Consumer Advocates, a nonprofit that protects consumers' rights. He suggested that consumers would be better off filing complaints with the state attorney general's office and local consumer affairs personnel. 

Banks said they will look into consumer complaints about surcharges that weren't adequately disclosed, but didn't directly answer questions about whether they pass on information about alleged infractions to networks for enforcement purposes. 

Sarah DuBois, a spokeswoman for Wells Fargo, said customers should reach out if merchants aren't transparent about processing fees.
"The customer can dispute the transaction, as they did not receive clear information where they could have made a different payment decision," DuBois said in a statement.

The major networks, including Visa, Mastercard, Discover and American Express, didn't directly respond to questions about how they handle complaints about improper surcharges.

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