Bill would stop retailers from charging you more for using credit cards

SPRINGFIELD — Retailers across the state can now charge consumers who pay by credit card a fee of up to 4 percent, but a suburban lawmaker has penned a proposal that would prohibit the practice again.

State Rep. Barbara Wheeler, a Crystal Lake Republican, said her legislation is about protecting consumers.

“This is not an anti-business bill,” Wheeler said. “Just because the court allows them to charge customers extra does not make it right.”

But state business groups do not see it that way. Kim Maisch, Illinois state director of the National Federation of Independent Business, said while her group does not have an official stance on Wheeler's bill, it is not a big fan of government mandates.

“The marketplace will take care of this issue,” Maisch said. “Consumers, particularly in today's economy, are pretty savvy when it comes to buying products. If for some reason a store says, 'We are going to start charging you more,' they are going to vote with their feet and go somewhere else.”

Several major national retailers, such as Walmart, have said they have no plans to begin charging credit card users more, despite being able to.

Retailers are charged what are known as interchange fees by credit card companies whenever customers use credit cards to make purchases.

Rob Karr, executive vice president for the Illinois Retail Merchants of America, said in order to compensate for interchange fees, retailers already have raised prices of their products.

“Customers pay the fee already,” he said. “They just didn't know it.”

Wheeler said that argument is disingenuous because it makes it seem like credit card use hurts businesses.

“Trust me, if customers using the credit cards was such a financial problem for businesses, they wouldn't allow them to use cards in the first place,” Wheeler said.

Retailers are allowed to charge credit card users extra because of a court battle between merchants and credit card companies. Last July, the two sides agreed on a $7.25 billion settlement which also allowed merchants to charge the new fee.

As part of the settlement, retailers, both brick-and-mortar and online, who choose to charge the fee must post signs to inform consumers of the fee. They must also include the fee on the consumer's receipt.