Legal advice on debit card use.

[sabula]

In the last couple of weeks I have made purchases at two local establishments. One was a gift house and one was a restaurant. In both cases I used my debit card. Both places charged me a 4% service fee. I didn't think this was right and went online and checked. Everything I Google says you're not allowed to charge a service fee on debit card transactions. We all know you can do it on credit card transactions and it's routinely done. But not on debit card transactions which immediately come out of your bank account. I don't always believe everything I read on the internet but this looks pretty good. It said it was not legal in all 50 states. Anybody have any advice on the legality of charging a service charge with a debit card use?

 

[NDallasRuss]

Did you use your pin to complete the transaction? If not, then I believe it processed the same as a credit card transaction, and the fee could be allowable.

 

[sabula]

Did you use your pin to complete the transaction? If not, then I believe it processed the same as a credit card transaction, and the fee could be allowable.

No pin used. Just gave the clerk or waitress the card and they brought me back a receipt that showed I owed more than the original bill I got, by 4%

 

[sabula]

Did you use your pin to complete the transaction? If not, then I believe it processed the same as a credit card transaction, and the fee could be allowable.

Also it couldn't have process the same as a credit card transaction, because the money was taken out of my checking account immediately. That's not what a credit card does.

 

[CLUB215]

Why not pay in cash if you're using a debit card?

 

[CLUB215]

Also are you 65+?

 

[millah_22]

Did you use your pin to complete the transaction? If not, then I believe it processed the same as a credit card transaction, and the fee could be allowable.

Google says even if run as a signature based transaction it shouldn't have fee added.

 

[mnole03]

Also it couldn't have process the same as a credit card transaction, because the money was taken out of my checking account immediately. That's not what a credit card does.

It was processed used Visa or MC credit card system and is subject to their fees.

 

[bagdropper]

So, the receipts. I'm curious how this is listed.

I'm curious if this is one of those kind of fees that Jethro's recently began adding to bills... didn't they call it an inflation fee?

Something tells me they're sort of terming this to where they can get away with adding it on without it being flagged as a credit card transaction fee.

What also surprises me is two completely different types of businesses did it, which would make me think maybe the bank did this somehow.

 

[bagdropper]

It was processed used Visa or MC credit card system and is subject to their fees.

My questions would be wouldn't he be getting that fee in every transaction like this, and maybe this is an agreement between his bank and MC/Visa to do this?

 

[beanT]

It is an issue with our POS. All visa & master cards are run through as a credit card transaction regardless if it is debit card. A business does not have to accept debit card transactions and many POS systems can’t run them as debt (your state may vary). The business is probably paying the fee regardless. I would be more pissed about 4%. In Illinois, you can’t charge a fee above the credit card processing amount. Ours is currently 2.4% plus 10 cents. Even at a restaurant with a tip added, there is no way to justify a 4% charge.

 

[goldmom]

No pin used. Just gave the clerk or waitress the card and they brought me back a receipt that showed I owed more than the original bill I got, by 4%

First mistake was letting your debit card out of your sight.

 

[SB_SB]

Also it couldn't have process the same as a credit card transaction, because the money was taken out of my checking account immediately. That's not what a credit card does.

It's not about how the money is removed from your account, it's about the flow of the transaction through the payment network. If it's processed as pinless debit going through MC/VI then you could see those fees. Keep in mind the transaction isn't just between the restaurant and your bank account, there are many hands that can touch those transactions, and they all want to be paid. The restaurant is probably just passing along their cost of the transaction, and if they pass it along, they probably don't care what the charges are.

 

[ericram]

First mistake was letting your debit card out of your sight.

I am blown away how behind in simple technology the States are. Living in Ukraine and Poland they bring to you or have the machine ready. I just hover and it's done.
Then bringing a fold, then you out your card in the sleeve and then they eventually come back and pick it up. They take it off some where and bring back a receipt hopefully with the card or not scanned to steal the account number.

I am in a 3 world country who has a war going on and my phone to pay for everything. Today I forgot my wallet and even the small veggie or meat stores paid worth a hover.

 

[SB_SB]

I am blown away how behind in simple technology the States are. Living in Ukraine and Poland they bring to you or have the machine ready. I just hover and it's done.
Then bringing a fold, then you out your card in the sleeve and then they eventually come back and pick it up. They take it off some where and bring back a receipt hopefully with the card or not scanned to steal the account number.

I am in a 3 world country who has a war going on and my phone to pay for everything. Today I forgot my wallet and even the small veggie or meat stores paid worth a hover.

Where you're at you probably don't have all the legacy applications and hardware. When moving EMV, just think of all the gas pumps that had to be updated. It's not an easy task, with the cost and man power to do it. The regulations in other countries also is different and forces the changes quicker.

 

[sabula]

It was processed used Visa or MC credit card system and is subject to their fees.

Not per my Google search.

 

[sabula]

I am blown away how behind in simple technology the States are. Living in Ukraine and Poland they bring to you or have the machine ready. I just hover and it's done.
Then bringing a fold, then you out your card in the sleeve and then they eventually come back and pick it up. They take it off some where and bring back a receipt hopefully with the card or not scanned to steal the account number.

I am in a 3 world country who has a war going on and my phone to pay for everything. Today I forgot my wallet and even the small veggie or meat stores paid worth a hover.

I see some vendors do this at the table, others take it away and process it at the desk.

 

[SB_SB]

Not per my Google search.

Dude, google isn't going to tell you the routes being used for processing a credit/debit card.

 

[sabula]

Dude, google isn't going to tell you the routes being used for processing a credit/debit card.

Google stated it's the law in all 50 states the credit card transactions can have a service fee added, but debit card transactions may not. Like it don't like it I don't care. That's what they said.

 

[SB_SB]

Google stated it's the law in all 50 states the credit card transactions can have a service fee added, but debit card transactions may not. Like it don't like it I don't care. That's what they said.

It depends on how those fees are labeled. The restaurant might even be processing your card using a credit route which could allow for adding fees. You'd have to go to the restaurant to find out how they process your card and who they use for an acquirer. Even with debit the fees are different depending on the route.

 

[ericram]

Where you're at you probably don't have all the legacy applications and hardware. When moving EMV, just think of all the gas pumps that had to be updated. It's not an easy task, with the cost and man power to do it. The regulations in other countries also is different and forces the changes quicker.

It's been at least 10 years in my travels that other counties are better at tech than the States.

 

[stickman80]

It depends on how those fees are labeled. The restaurant might even be processing your card using a credit route which could allow for adding fees. You'd have to go to the restaurant to find out how they process your card and who they use for an acquirer. Even with debit the fees are different depending on the route.

Correct. It's how the transaction is settled..not how the transaction is originated.

OP, unfortunately you have zero control over how it is settled.

I pay cash whenever possible and am VERY careful about using my debit card. I've never once used a debit card at a restaurant, gas station, or ordering something on line. For fraudulent transactions it is much harder to get your money back than with a credit card where it's not your money spent until you pay off the charges. Much more leverage for you.

 

[Formerly Rockymtnole]

These places with their added fees for credit card use can get lost. Let’s see how they like 100% of 0.00 of my money.

 

[SB_SB]

Correct. It's how the transaction is settled..not how the transaction is originated.

OP, unfortunately you have zero control over how it is settled.

I pay cash whenever possible and am VERY careful about using my debit card. I've never once used a debit card at a restaurant, gas station, or ordering something on line. For fraudulent transactions it is much harder to get your money back than with a credit card where it's not your money spent until you pay off the charges. Much more leverage for you.

Agreed, I don’t even own a true debit card. I still get a “cash station” card that can’t be used at other locations. I always use credit so I have limited liability

 

[10kHawk]

Interchange rates aren’t 4% seems high especially for debit