Credit card surcharge with immediate credit in the wild
 

I was recently at a Dairy Queen in a resort town in California that had a sign (see below) listing a 39 cent "customer service charge" to pay with a credit or debit card.

Right below it was another sign saying that you would get a 39 cent discount on the service charge by paying with a credit card. (I'm not sure if you also got the 'discount' from paying with a debit card.)

I figured this was just some sort of pretense so they could start surcharging in the future, but the interesting thing about this was that the receipt I got from them clearly showed a $.39 charge and a $.39 "discount" applied to the bill.

(Yes, it shows Chip but the terminals were not customer facing.)

Anybody care to suppose why they are doing this in this way? What advantage does it give the merchant to structure the transaction like this?

https://cimg4.ibsrv.net/gimg/www.fly...fb11cd168b.jpg
https://cimg6.ibsrv.net/gimg/www.fly...74673cc77a.jpg

My best guess is that it's related to a 1985 California law prohibiting credit card surcharges, which has been subject to court challenge:

https://oag.ca.gov/consumers/general...ard-surcharges

Perhaps they first imposed the fee on credit and debit card purchases, then decided to backtrack on credit card purchases because of uncertainty surrounding the law by effectively refunding the fee.

Note that setting out the fee like that insures, at least in the case of debit card purchases, that it's not subject to California sales tax:

Regulation 1643

I came across a Jack in the Box in some Los Angeles suburb (very vague I know) that did this. The receipt looked identical for the card processing with the fee line then discount line. If you use PIN-Debit, you will pay the fee.

You are lucky. Up here in Nevada where I am, we have a Dairy Queen in Carson City, NV and in Reno, NV who has a creatively worded "employee service fee" that applies a .59 charge to every transaction. However, if you pay with cash, you will not be charged that fee. It is a card fee. Receipts are frequently not issued and they quote you the total before the fee, then if you pay with a card, the fee gets tacked on and shows on the receipt as "ESF" so when you send it in to the complaint area of Visa or MasterCard it looks like "another item" on the receipt. Very shady business practice. I also lodged a complaint with Dairy Queen International (franchisor) who basically told me the locations are independent franchises who can do whatever they want.

The sign is suspiciously similar. https://www.google.com/maps/uv?hl=en...9WqR5afs2Rzo6P

Googling the US patent numbers on the bottom of that sign is...interesting. I didn't think it was possible to patent surcharging for card use (well, software to automatically apply said surcharge, but still).

I think you are correct, this is an attempt to establish the legal right to apply a card surcharge. The $0.39 credit is characterized as a "discount" rather than as a "refund" of the fee.

Credit card surcharging is just bad customer service.

You're basically punishing people for wanting to pay with 21st century technology instead of disgusting cash.

If you want to surcharge for credit cards, pay your own sales tax then. Stop passing every cost to the customer.

It's no different than a la carte pricing on airlines these days.

If you use a service, you pay for it. If you don't use it, great, don't pay for it.

But, just to be clear, in this case, there is no net surcharge.

I think you just undermined your own analogy.

I don't think so. I'm speaking about a surcharge in general, in response to the post before mine.

I'm also noting that this doesn't apply in this case.

While there's no "net surcharge" here, it's done at many other places where credit card surcharging isn't illegal.

Your airline argument is pointless - nobody said I agree with what the airlines do.

Nor did I.

But, man, I really seem to have hit some nerve.

You're interpreting the tone of the words differently than I intended them to be. They're merely words on a screen.

Thinking about it more, I suspect they actually wouldn't remove the surcharge if you give them a debit card. It almost seems easier for them to get their processor to remove debit support altogether from their terminals and route everything over Visa/MC if they're truly paying more for such transactions.