Country Place, the homeowner association for a large neighborhood in Carrollton, Texas, uses a service from Smartstreet that allows homeonwers to pay annual their dues with a credit card for a service fee of $9.95. Generally speaking most credit card companies (e.G., American Express, Discover, MasterCard, Visa) do not permit this practice, yet this company — a bank — routinely adds this fees at the end of the transaction. Here's what the Merchant Council has to say about this practice:
VISA states that "you may not impose any surcharges on VISA transactions. You may, however, offer a discount for cash or another form of payment (e.G., proprietary card or gift certificate) provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment"
MasterCard states that "A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments."
Discover states that "You may assess a surcharge on a Card Sale conducted using a Credit Card provided that (i) the amount of the surcharge may not exceed the Merchant Fee payable by you to us for the Card Sale, and (ii) you assess surcharges on card sales conducted using other credit cards accepted by you."
American Express states that "You must not accept the Card for costs or fees over the normal price of your goods or services (plus applicable taxes) or Charges that Cardmembers have not specifically approved."
Every originator except for Discover forbids surcharging credit card sales, however, as MasterCard so clearly states, "A Merchant may provide a discount to its customers for cash payments."
No discount for cash payments are offered to homeowners at Country Place. Shame!
(http://www.merchantcouncil.org/merchant-account/operation/pass-fee-customer.php)
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