Kia Dealer Slipping A Credit Card Surcharge To Their Service Bills......

[global1]

I made an appointment today to take my Kia Soul in for service (basically an oil check and change). I just received an e-mail confirmation for my service appointment - with this bit of new information tacked on to the e-mail.

It reads:

As of March 1st 2023, there will be a 3.25% charge for credit card payments. There is no fee for debit card payments, cash payments or checks. Thank you for your understanding.

It's always been my understanding that a credit card is a convenience when you purchase something. If I don't pay my bill on time or if I pay only a portion of my monthly bill - the credit card company charges me interest and late fees if I don't make the payment by the deadline.

I've always come to believe that businesses accept credit card payments without tacking on a surcharge for a customer making a payment by credit card. I've always thought that "it is a cost for the business for doing business".

I'm terribly upset about this surcharge and I also question the legality of a business to add such a surcharge to their bill.

My eye-doctor tried to do this during the pandemic. I called him on it and said it was unfair to pass that on to the patient. I told him it was a cost of him doing business. On my next 6 month visit to his office - his credit card surcharge was eliminated. I'm thinking that he got an earful from other of his patients.

Aren't surcharges like this what Pres. Biden commented on in one of his speeches and was moving to do something to eliminate them?

I'm going to pay this Kia dealer with a personal check. Then I'm going to look for other Kia dealers in my city that aren't tacking on a credit card surcharge. I'm going to take my business elsewhere and never do business with this dealer again.

I'm thinking that other car makers aren't instituting such surcharges. I'm also thinking of writing a letter to the editor of our local community newspaper and putting it out their for other customers and potential customers to see.

What do you think? Is such a surcharge legal? Am I wrong for making such a fuss about this? Has anyone else run into such credit card surcharges? I'm curious to hear what others think about this.

[Enter stage left]

1. My advice...follow WITH your money.

And don't forget to let them know why.

[DURHAM D]

2. Where I live dentists, hair dressers, auto repair places, barbers, etc.

prefer checks. If you use a credit or debit card the bank keeps a percentage - usually at least 3%.

[GregariousGroundhog]

16. Your information is only partially correct for debit cards in the United States

Financial institutions with more than ten billion dollars in assets are are limited to charging $0.21 plus 0.05% of the transaction. Credit cards interchange fees are not regulated, and range between 1-3%.

[DURHAM D]

18. Well shame on me.

[Delphinus]

39. Oh,

that's good to know. I'm guessing my smaller bank (Flagstar) doesn't have that much, but my husband's would (Chase). Perhaps a check would be best.

[NoMoreRepugs]

3. Just did a bathroom remodel. Custom shower door firm

had a 3.5% surcharge for cc. Seeing it more and more.

[GuppyGal]

27. +1000

[raccoon]

50. Some restaurants are doing it too.

[OAITW r.2.0]

4. I think the cc companies are at least partially responsible.

I think they charge a % on the transaction to the seller. A couple of years ago, I went to pay my property tax at the town hall. They wanted to charge me 2% on my debit card,,,,I said, no worries, I will come back with a paper check, Instead of getting my money immediately, they had to wait 3 days lor my check to clear,

[bucolic_frolic]

5. I thought at one time is was illegal to charge more for credit card or to offer cash discounts

Taxes and utility bills charge a CC surcharge here.

[brooklynite]

20. Why would it be illegal? We don't have price controls.

[Ms. Toad]

22. It wasn't illegal,

But it was a violation of the contract between the credit card companies and anyone who agreed to accept payment by credit card. If you didn't agree not to charge more, you simply couldn't accept credit card payments.

That must have changed recently, since more and more companies are tacking on a surcharge.

ETA: recently is apparently a matter of perspective. The change was in 2013 as a result of a lawsuit.

[bucolic_frolic]

35. Yes, that is my point, it was illegal at some point and remains illegal in some states

And I do remember it being stated as illegal in the 1990s, by the laws Congress passed. Credit card surcharges were verboten.

Here's the 2022 skinny on credit card surcharges:

https://www.valuepenguin.com/credit-card-surcharges-convenience-fees

"Credit card surcharges, convenience fees and minimum purchase requirements are all fees that merchants can add to offset the cost of pricey processing fees. Keep in mind that surcharges and convenience fees are illegal in some states and can only be applied to credit card transactions."

"Ten states prohibit credit card surcharges and convenience fees: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. It is illegal for merchants to add any surcharges to credit card transactions or charge convenience fees to nontraditional payment methods in these states."

__________________________

I remember in the 1990s signs saying something to the effect "cash same as credit, no cash discounts" and merchants asking at checkout, "cash, check, or credit card?". You could not wrangle $15 off a $500 item by offering to pay cash.

Once a USPS employee dryly pulled the 'cash, check, credit card' line on me at checkout. For a total amount of about 50 cents! He was a frustrated comedian.

[Ms. Toad]

44. There is a difference between being illegal,

And violating a contract provision. Credit card surcharges were provided by contract, not by law until 2013. A lawsuit prohibited enforcement of that contract provision, which is why credit card companies can no longer prohibit surcharges.

If have to look at the case to see whether that same rational would apply to the state laws that appear to have popped up since then. (I'm other words, those laws may be unenforceable, as well, depending on why those who sued the credit card companies won.)

[bucolic_frolic]

47. To repeat the post to which you are replying, surcharges are prohibited in 10 states

"Ten states prohibit credit card surcharges and convenience fees: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. It is illegal for merchants to add any surcharges to credit card transactions or charge convenience fees to nontraditional payment methods in these states."

If you consider prohibition by a state to not mean illegality, fine. But prohibition to me means illegal.

[Ms. Toad]

48. You seem to be ignoring most of what I said.

Before 2013, the prohibition on surcharges was by contract, not by law. In other words, if you wanted to accept credit cards in your business, you were required to sign a contract agreeing not to charge extra for people to use credit cards. If you imposed a surcharge, you would be taken to court not for breaking the law, but in a private action for breaching your contract. So the vast majority of time during which surcharges were prohibited (from the advent of credit card usage to 2013), in the vast majority of states (all states prior to 2013), it wasn't illegal - simply a breach of contract.

Those contract provisions were declared unenforceable based on a lawsuit in 2013.

It appears that since then, a few states have decided the credit card companies had it right and have enacted state laws. Whether those state laws are enforceable or not, I don't know. It would depend on the basis of the 2013 court decision.

[EX500rider]

52. And yet the Fla DMV adds a surcharge for CC use. nt

[Delphinus]

40. I've seen

a few gas stations doing that.

[wishstar]

54. A lot of gas stations charge $.10 per gallon more for credit cards vs. cash

but quite a few top tier stations around me charge the same lower amount for both credit cards or cash, so that's where I buy gas with credit card since I get 3% cash back on my credit card.

[hunter]

51. It wasn't illegal, it was in the contract with the credit card companies...

... that no surcharge would be charged to customers by the business accepting the credit card. The charge would be paid entirely by the business.

Restaurants and the like accepted this policy to attract more customers.

The first I recall this system breaking down was at gas stations. People buying gasoline are extremely sensitive to a few cents difference in the price posted on the street. Stations advertising a cash price posted lower prices. Eventually the price difference between cash and credit was built right into the pumps and street signage.

[roamer65]

6. It's common in Michigan at gas stations.

Prices with a credit card are quite often 10 cents/gallon higher with a credit card.

That’s why I pay cash for gasoline.

[orleans]

28. there is one station near me that does the 10 cents per gallon higher w/ cc.

i'm in chicago burbs. all the other stations i'm aware of in my radius do not do that.

[roamer65]

29. Zappa!

Big Frank Zappa fan here, btw.

[orleans]

30. lol

yes, he was great

[ProfessorGAC]

53. A Place Right By Our House Does 5 Cents

They're the only one in town doing it. (Five stations in town)

[TwilightZone]

7. Lots of companies have credit card surcharges, especially small businesses.

Otherwise, they have to eat the cost or raise prices, the latter usually more likely.

Rather than making everyone pay for the costs of accepting credit cards, your dealer has chosen to recoup it from just those who use them. Personally, I think that makes more sense, even if I, like you, would prefer not to pay it.

"I'm thinking that other car makers aren't instituting such surcharges."

Dealers are independent businesses. The decision to add the surcharge is almost surely that of the dealer, not the manufacturer.

[W_HAMILTON]

32. I think it's a normal and expected cost of most business and should simply be built into the price.

There are also costs associated with payments in cash or check (e.g., preparing deposits, delivering it to the bank, following up on NSF issues, possible loss issues related to having cash on hand, etc.).

[Nixie]

8. Coincidence! We just went to a Honda dealer to get a part, and

the cashier said they charge for credit cards. It was a new one on us.

I have the same questions you do now.

Yesterday we had the car serviced at another dealer, and they didn’t mention a charge for credit card, but now I’ll check. Seems they would have said something first, but I’m curious now.

[keep_left]

10. Yeah, this is becoming more common. A local grocer (Chinese bodega) told me...

...that the credit card companies aren't just screwing the consumer anymore, they're now screwing the merchants, especially the smaller ones. He has a $15 minimum on credit card transactions. A couple restaurants and delis I frequent also have this policy (some charge a fee for credit cards, others give a discount for cash payments). I used to have my doubts about whether the businesses were really getting hosed like they claimed, but with how much of this I'm seeing these days, I'm going to bet that they're being honest with me.

[TheBlackAdder]

11. If your dealer is fugazi, only take your car to them when it is imperative.

.

Ever notice that sometimes when you leave the dealership, something else is broken or breaks shortly afterwards?

Sketchy dealers will take parts off of your working vehicle and swap them with another car. They will charge the other person full price for parts and labor. You will leave and notice that something is wrong with your car and bring it back for service. This is especially true if your car is still under warranty and the other person was out of warranty. They will send in that other person's part as yours. The automaker does not punish dealerships for doing this, as they have little influence over them, especially if they are a high-volume seller.

Either way, you will either be inconvenienced or also out of pocket some cash.

Taking your car to a non-dealer facility minimizes this risk as your car will probably be the only model they service that day. Whereas when you take your car to a dealer, that's all they service, so the probability of another similar car being serviced is extremely high. If the other person wants their car fixed right away, and they don't have that part in shop, they have to order it from the parts depot and that might take next day or the day after to receive--making swapping of parts even higher.

If a dealership is nickel and diming customers, then they probably are also scamming on service too. They might claim they change the oil filter, lube the car, or perform other kinds of service, but in reality just bill you and don't. It's just something to think about.

.

[Zeitghost]

12. It's legal

And common.


I'd worry a lot more on how much the dealer is overcharging you for service than the 3.25% CC surcharge.

I've found you can get better service at a much lower price with a small local shop with a good reputation. Having cash in hand is also a good way to get a good deal.

[Mosby]

13. Retailers pay a % to the cc company for credit card transactions.

Some cards more than others, your Disney points, frequent flyer points are being paid by the retailer. It's usually 1.5 to 3 percent depending.

Debit transactions whether pin/sig are a flat fee, like 2-10 cents.

[Nixie]

14. Just checked the service invoice and no credit card fee.

Just oil and transmission haz waste fees, small ones.

I have learned that all dealers are very ethically different, though. In general, we stay away from the dealers, but it was a milestone checkup and sometimes we like to get that recorded in the Honda books. We have a couple private people who are half price and just incredibly honest and ethical.

[MiniMe]

15. I thought that they couldn't add a surcharge for using credit, but they can give a cash discount

I could be wrong about that, but otherwise why would any business take credit cards? The credit card companies are the only ones who are making out on this deal. They get 1-1.5% on the purchase, and they get money if you don't pay.

[Ms. Toad]

25. That used to be the case,

until they lost a lawsuit in 2013 . . . seemed like yesterday to me until I checked my memory with a search enginge.

[moose65]

17. My Honda dealership started doing that in February

I went in for an oil change and tire rotation, and the total was $98.98. I handed the technician my Discover card, and he said, "Is this a credit card? Did you see our announcement on the sign?" I had not seen it, so I paid with a debit card instead.

Sometimes if you get major services like new tires or new brakes, you can be looking at a big bill of over $1,000. I can't pay that with a debit card - I'd prefer to use a credit card for those large purchases. I guess they'll be adding the surcharge onto those!

Like others have mentioned, I have assumed that accepting credit cards for payment and paying the fees was just part of the "cost of doing business," since most people don't carry much cash with them. I don't really like this trend of surcharges. I would rather them just raise their prices and give a cash discount, if they want to.

I hate those "hidden fees." Last week I was comparing prices on 1800Contacts and Lens.com. Lens.com had the lower price on my brand of contacts, by about $25 a box. I put some in my shopping cart and was ready to check out, when I saw a "standard fee" of $26.99 added into my total, rendering that $25 discount useless. Ugh.

[GoodRaisin]

36. Time to go back to writing checks, I guess

for big purchases.

[moose65]

38. Well, no....

A check is just like a debit card - you have to have all the money available right then. If I had some kind of emergency and had to pay $1,000 for a car repair, I'd rather use a credit card. Right now, I have one with an introductory 0% APR, so I could spread the payments out over several months without having to pay interest.

[GoodRaisin]

42. Oh, well,

it’s dependent on how you manage your money, sure.

I’ve gotten in the habit of using my credit card for just about everything I buy in stores or on line, but pay my credit balance every month so don’t have to worry about the APR. Paying fees for credit card purchases could get pretty expensive for me if the merchants start charging me fees. I never use my debit card for purchases but have a few checks still for when needed. If I have a big bill I usually keep enough cushion in my checking account to cover a check if needed to avoid a fee. I’d rather do that than pay, say, $30 to use a credit card charging 3% on a $1000 purchase.

[moose65]

49. I pay mine off every month, too

Credit card interest rates are insane.

[brooklynite]

19. Telling you upfront that there'll be a credit card surcharge isn't "slipping"...

...complain all you want, but plenty of businesses are charging extra for credit card use. especially since COVID. They're being charged up to 8% for processing a CC payment. Of course, they could just increase their prices and spare you the outrage.

[Chainfire]

21. There was a time that credit card companies would refuse to do business with someone who charged

a fee. So many people do it now, they must have dropped the policy.

[Ms. Toad]

23. I just checked that -

it was true until 2013, when they lost a lawsuit and had to allow vendors to tack on a surcharge.

[FemDemERA]

24. I don't know about car dealers but

I know some restaurants and smaller businesses had started doing this several years ago, prior to the pandemic. When it first happened to me at a restaurant I asked why and they said the card companies had raised the rates on them and they were passing the additional cost on only to those using the cards. I liked the restaurant so after that, I just made sure I had cash whenever I went there.

[Thunderbeast]

26. If you want "fairness", stop gaming the perks!

Merchants might improve their image by raising prices 5% and offering a 5% cash discount.

The whole model is unfair to poor consumers who do not pay with a credit card. They now pay the premium on all transactions, even those paid by cash.

Credit card buyers on the other hand game the system by expecting "cash back" or airline miles for their purchases. A significant portion of their merchant fees end up being returned to their customers as kickbacks. Thus credit card buyers are now subsidized by cash buyers who pay the "swipe fees baked in" prices on everything in their cart.

[moose65]

41. I would prefer the discounts for cash

Around here, a few restaurants offer discounts for paying in cash, and of course many gas stations have offered a cheaper "cash price" for years.

During the pandemic, there were a couple of restaurants that had signs up encouraging people to pay in cash, but I don't remember if they offered a discount or not. I don't usually carry much cash with me, and I used to use a debit card for purchases until I realized that credit cards usually offer more protection for fraudulent transactions than debit cards do.

If credit cards have raised their fees for processing, how do we find out that information? Is that part of the massive disclosure thing they send you that nobody reads??

[Ilsa]

31. My doctors' office is doing the same, adding 2 or 3% for

paing with a credit card.

[AnotherDreamWeaver]

33. some gas stations have charged less for cash for years.

[lostnfound]

34. Credit card companies are like a 3% tax on everything we buy, payable to a private company

It’s pretty unhealthy, actually. I use them too, but they are a great mechanism to constantly funnel cash upward to the 1%.

[nuxvomica]

37. My Toyota dealer charges a credit-card fee

They just started doing it this year but I only pay by check or cash anyway. I only use my credit card for online purchasing and situations that require a credit card, like hotels and car rentals. I first encountered the issue back in 2020 with the town clerk's office, which started charging a fee on tax payments for credit and debit cards, but not for cash, checks or electronic transfers. Worse than that, if you want to pay your tax bill in person, they only accept cash. I have a writing workshop this summer at a local college and they also charge a fee for credit or debit cards so I paid them with electronic transfer.

[themaguffin]

43. Local companies do that all the time. I noticed that some gas stations started doing it. They even

post separate prices, one for cash, one for credit.

[EX500rider]

45. It's the most fair way to me

I don't see why you should get a 3% discount for using your CC or why it would be fair to raise their rates by 3% for everybody incld those who don't pay by CC.

I have a small company and the $700+ out of my account for CC fee's at the start of the month has to come from somewhere.
I now show it separately on the bill to encourage cash/checks/Zelle

[Hekate]

46. There was a credit card surcharge back in the day because the vendors got charged for their use

Small vendors especially found this hard, but the way they phrased it (often by a placard at the cash register) was that you got a discount for cash.

Clearly I have not kept up, because I’m old enough that I adjusted my buying habits accordingly long ago. I don’t care for usurious interest charges, so only charge what I can pay for in 30 days.

As for its legality — yes it is, as a cost to the vendor is being passed along to you the customer.