merchant charges - can they legalle be passed on

zarazag

Hi - I am buying a car next week and want to put the transaction - or at least part of it on my tesco cc to get the points! Been told by the garage that as they are charged they will be passing the 1.5% charge on to me - I have looked on mastercard and under section 5.11.2 cahrges to cardholders it says they can't do this unless they charge the same across ALL forms of payment. I won't be cahrged for paying using a debit card. I have spoken to tesco mastercard and the gen manager at the dealership and both say they can do this ---wonder if someone can clarify please as this conlflicts with the info on the mastercard site

many thanks

lisyloo

unless they charge the same across ALL forms of payment

I think you might have read that a bit wrong.
I am pretty sure they can charge.
Can you give us a link to the page where you are seeing this rule and we can explain it better.

Eydon

It's perfectly normal for retailers who sell high value items to pass on the charge - 1.5% is actually quite low.

I suspect what section 5.11.2 means is that if they charge then they must charge the same for every Mastercard credit card. Similarly, if they charge for Visa credit cards then they will charge the same for every type of Visa credit card. I can't see how Mastercard could possible dictate what charges are applied to Visa cards and vice versa.

lisyloo

That would be my understanding too.
and tons of companies do it.
I would have thought if it was illegal then someone would have challenged it successfully by now.
Of course what will happen then is higher charges and "discount for cash".

Fruit_and_Nut_Case

zarazag wrote: »

Hi - I am buying a car next week and want to put the transaction - or at least part of it on my tesco cc to get the points! Been told by the garage that as they are charged they will be passing the 1.5% charge on to me - I have looked on mastercard and under section 5.11.2 cahrges to cardholders it says they can't do this unless they charge the same across ALL forms of payment. I won't be cahrged for paying using a debit card. I have spoken to tesco mastercard and the gen manager at the dealership and both say they can do this ---wonder if someone can clarify please as this conlflicts with the info on the mastercard site

many thanks

That's the "Worldwide" rules. Europe has some exceptions if you plough your way through this.

ILW

If you dont like it, walk away.

lisyloo

They might waive it if you threaten to walk away.
Depends on whether you've negotiated hard already and how far they are away from their bottom line and whether you are prepared to do it.
If you're paying cash you probably have more lee way than if you are trading in.

chattychappy

They are entitled to do this.

It used to be a condition of the contract between merchants and banks that merchants didn't offer preferential terms for non-credit card deals. Some credit card companies had a policy of encouraging consumers to "snitch". I remember Amex (chargecard) used to have a special "snitch hotline" you could call if a shop offered you a better price for cash or tried to impose a surcharge. As a merchant, Barclays tried to tell me that I couldn't operated differential pricing.

But the law doesn't allow such a condition anymore (competition grounds), and even if it did, this would be a matter between merchants and banks. Incidentally, banks can still impose a condition on merchants that any surcharge doesn't exceed their cost of handling a credit card payment.

So they can do this provided if they've offered to take a credit card they've told you about the charge before signing up. There are a few regs about advertising pricing etc, but unlikely to be relevant here.

chattychappy

Fruit_and_Nut_Case wrote: »

That's the "Worldwide" rules. Europe has some exceptions if you plough your way through this.

Yes.. top of page 12-21:

"Rule 5.11.2 ... does not apply in the EEA"

bert&ernie

Credit card surcharges are explicitly permitted under UK law. The credit card schemes cannot prevent a retailer appying these charges.
Credit Cards (Price Discrimination) Order 1990 (S.I. 1990 No. 2159)

chattychappy

bert&ernie wrote: »

Credit card surcharges are explicitly permitted under UK law. The credit card schemes cannot prevent a retailer appying these charges.
Credit Cards (Price Discrimination) Order 1990 (S.I. 1990 No. 2159)

Thanks for that - I couldn't remember the authority when I wrote my post above. The effect is to prevent banks preventing merchants from surcharging credit cards. However note that banks CAN prohibit surcharges being above what they charge the merchant:

4. Article 3 does not apply to a requirement [...]

• (b) to limit the maximum amount of a difference in price to the amount of the fee or charge imposed under the agreement with respect to the reimbursement for supplies made on the production of a credit card.

And this appears to be the gist of the condition at page 12-21 "If a Merchant applies a surcharge for payment by Card, the amount or method of calculation of the surcharge must ... bear a reasonable relationship to the Merchant's cost of accepting Cards."