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Credit Card Surcharges/service fees from 13 Jan 18

Original Article https://www.accountingweb.co.uk/business/finance-strategy/how-will-business-respond

So how are small retailers with terminals that they process credit and debit cards on low value and third party transactions for paypoint payment processing and low value transactions through their merchant account going to provide the service without charging customers a service charge?  Is the new rule applicable to them?  I posted this response in July 17 to the above article:  The article itself uses the term UK Company as the businesses that the new rules will apply to. Therefore if a business is a sole trader or proprietor, a partner in a trading partnership or LLP then they are not a UK Company. Also under contract law rules if it is a retail shop the display of goods at a specific price is regarded as invitation to treat it is up to the shopkeeper if they are willing to sell them at the marked price. The marked price could be regarded as a discounted price and when the person pays for their goods the shop keeper could total the price for the goods purchased and add the extra service they are giving by processing the debit or credit card as the price they require to sell the goods to the person. In addition to this where they are offering a service to their customers such as bill payments for which they receive a commission charge the element of service they provide is having the terminal available to the customer. The charge to the customer is their service charge to cover their costs providing the service. If it is a service charge therefore it is not a debit/credit card charge.  Any other helpful suggestions to this?

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13th Jan 2018 22:06

They'll just jack up prices generally.

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By ruthlo
13th Jan 2018 23:33

Small retailers cannot add a commensurate amount to low value items or indeed payment processing services they provide for paypoint or others without being allowed to charge a card service fee and cannot "jack up their prices".

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to ruthlo
14th Jan 2018 10:10

Then they won't be able to accept credit card payments.

What do you expect as a response ? It's the law.

Nevertheless, I'm not sure you aren't confused. You must charge the same price if you pay by cash or card. A booking fee, or similar, charged to all, isn't affected.

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By ruthlo
14th Jan 2018 17:38

a. The original article I saw last year stated: “The rules will apply to any UK company which is selling to UK consumers. We've asked the Treasury for a full definition of what it considers to be a UK company". The article link is: https://www.accountingweb.co.uk/business/finance-strategy/how-will-busin...
There have been several responses to this article, but so far no replies.
b. The rules on invitation to treat and the ability of the owner of the shop to charge the price they wish to sell the goods at or charge for the services they provide are still in place, and there is no law that says an administration charge cannot be applied against some transactions and a discount offered for others. See also other people that have posted previous responses to this article asking very similar questions that to date I have found no reply to.
c. The processing of a credit/debit card involves an electronic transaction that is a separate service which the merchant service provider charges fixed and variable fees to the retailer for. Would it be legal for a retailer to charge a flat rate Administration fee for the use of their time and the electronic terminal in their premises to process the transaction making this clear in a notice to all consumers when entering the shop? I have just found a link to a more detailed discussion of the 13 January, 2018 ban on credit card surcharges and their application by trading standards: https://www.businesscompanion.info/en/quick-guides/pricing-and-payment/p...

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