Debit card fees in Lancaster and I guess Pennsylvania in general are illegal.
Like every other normal consumer in the area, I go into area restaurants to buy food I like. For example, at Smith's Hotel in Columbia they have a sign up stating that there will be a 4% charge added to card usage. Whether they know it or not, it is illegal. It is for credit cards only, yet they still add these charges onto debit card payments as well!! BTW I make special trips to Columbia for their food because I like it, and this is of no reflection of the quality of their food. Its specifically about their surcharges in general. This also goes for any other business in the county or state for that matter.
Thats just one example and I certainly don't mean to single them out, but that's the last place I went that charges this fee, no matter if it is a debit card. Those surcharges may not seem like much when you are buying a sandwich, or whatever, but it adds up overtime and those companies are making that money illegally, and its not being utilized the way it was intended.
For those that make transactions in Restaurants and such, you will see that the business normally has a handwritten sign up on the wall that says they are charging a 4% fee for using a card. Did you know that this is actually illegal, and the business is liable for this? It's true and as a consumer we need to start fighting back.
It is legal for a credit card to be charged this 4% surcharge; however, this does not apply to debit cards. So that Convenience fee that you are seeing added when you use your debit card is actually illegal...
Is it legal in the Commonwealth of Pennsylvania to have surcharges for using a debit or credit card?
Yes, in Pennsylvania, merchants can legally impose surcharges on credit card transactions2. However, debit card surcharges are strictly prohibited. Merchants must follow specific rules, such as notifying customers about the surcharge and ensuring it does not exceed the cost of processing the credit card transaction1.
The Durbin Amendment, part of the Dodd-Frank Wall Street Reform Act of 2010, was introduced by Senator Richard Durbin. Its primary goal is to regulate debit card interchange fees (also known as "swipe fees") charged to merchants by banks. Here's a quick breakdown:
- Fee Cap: It limits the fees banks with over $10 billion in assets can charge merchants for debit card transactions to 21 cents plus 0.05% of the transaction value.
- Fraud Adjustment: Banks can add an extra 1 cent if they implement fraud prevention measures.
- Exemptions: Smaller banks (assets under $10 billion) and certain types of debit cards are exempt from these caps.
- Impact: While it aimed to reduce costs for merchants and potentially benefit consumers, critics argue that savings haven't always been passed on, and some banks introduced new fees to offset revenue losses.