Update on State Laws for Credit Card Surcharges

February 28, 2013
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Article from: The Memorial Business Journal

As reported in the January 17, 2013, edition of Memorial Business Journal, one aspect of the settlement of a seven-year class action antitrust settlement involving VISA and MasterCard permitted funeral homes in certain states to impose surcharges on consumers using credit cards beginning January 27.

VISA and MasterCard had been sued in a class action lawsuit involving the seven million retailers that accept those credit cards, having been accused of unlawfully conspiring to set the swipe fees that merchants pay the two credit card companies. Both companies have agreed to a $7.2 billion settlement, the largest antitrust settlement in U.S. history.

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According to T. Scott Gilligan, general counsel of the National Funeral Directors Association, a key element to the settlement from the standpoint of funeral service would be VISA and MasterCard’s agreement to eliminate their current prohibition against merchants imposing surcharges on consumers who pay with credit cards. Gilligan has compiled an in- formation sheet on where states stand on this issue. A dozen states are now considering a ban on surcharges, Gilligan said.
The 12 states that currently have bills pending or proposed that would prohibit a merchant from imposing a credit card surcharge against a consumer who pays with a credit card are Hawaii, Rhode Island, Illinois, South Carolina, Ken- tucky, Tennessee, Missouri, Utah, New Jersey, Vermont, Pennsylvania and West Virginia.

Surcharges Prohibited

The following 10 states that currently prohibit merchants from imposing a surcharge on consumers who pay by credit card are California, Maine, Colorado, Massachusetts, Connecticut, New York, Florida, Oklahoma, Kansas and Texas.

The remaining 28 states that do not have a prohibition against credit card surcharges and have no bills introduced to prohibit surcharges are: Alabama, Alaska, Arizona, Arkansas, Delaware, Georgia, Idaho, Indiana, Iowa, Louisiana, Mary- land, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, South Dakota, Virginia, Washington, Wisconsin and Wyoming.

Gilligan noted that prior to imposing a credit card surcharge, funeral homes must provide a 30-day written notice to VISA, MasterCard and their credit card banks or processors of their intent to add a surcharge. For VISA, merchants can submit a notification form by going to www.visa.com/merchantsurcharging. For MasterCard, go to www.mastercardmerchant. com to post the 30-day notice. After notifying VISA and MasterCard, also notify the bank or financial institution that pro- cesses your credit cards of your intent to impose a surcharge.

The surcharge may only be imposed on credit cards, not debit cards. The amount of the surcharge may not exceed the amount of the swipe fee paid by the funeral home on the particular credit card. Therefore, funeral homes will need to know how much a swipe fee is on each card if they intend to fully recoup the amount of the swipe fee.

Ryan Thogmartin

CEO at DISRUPT Media and ConnectingDirector.com
Ryan Thogmartin is the Owner and CEO of DISRUPT Media.

DISRUPT Media is a full-service creative agency built for the now. We partner with death care companies to drive deep-rooted brand loyalty and measurable leads through social media.

More Fans. More Conversations. More Leads.

Ryan is also the founder of ConnectingDirectors.com. ConnectingDirectors.com is the leading online daily publication for funeral professionals with a reader base of over 45,000 of the most elite and forward-thinking professionals in the profession. With ConnectingDirectors.com Ryan has created a global community through an online platform allowing funeral professionals to Stay Current. Stay Informed and Stay Elite.
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