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FF12: Kansas law allows government to charge fee for credit/debit cards, not private businesses

Chase Bank is changing its policy on credit cards so that you can't take them to court / Source: MGN
Chase Bank is changing its policy on credit cards so that you can't take them to court / Source: MGN(WVLT)
Published: Feb. 27, 2020 at 5:33 PM CST
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was ordered to pay more than $60,000 on Tuesday for charging a four-percent fee to customers who used debit and credit cards.

We told you about the judgment earlier in the week.

The big question many of you had: why is it okay for city and state government to do it if it's not okay for a private business?

The Sedgwick County District Attorney's Office says Kansas state law clearly answers the question.

Two Kansas statutes deal with the question of transaction fees in the state. One states private businesses cannot impose a surcharge on a customer based on how they choose to pay. The other states a city can set an additional fee for those opting to use a credit card, but only one equal to what the city has to pay to make that transaction go through.

Essentially, when a business or government entity runs a credit card, they are charged a fee. Government agencies in the State of Kansas can pass that fee onto consumers, but private businesses cannot.

A business can instead offer a "cash discount." This means a business can raise their prices to make up for the fee they're charged and then offer a lower price to those that pay cash. The district attorney's office says it's about truth in advertising so that the consumer knows the actual price.

The government can charge a surcharge fee because, unlike a business, it is not a profit generator. If the government doesn't pass the surcharge on to the taxpayer, then it would come out of services like fire and police.

Lastly, what about convenience fees?

You normally incur that cost when paying for things like tickets or other online purchases. The district attorney's office says those fees are not directly attached to paying by credit card and may include other services that may the buying experiences more convenient.

We've had so many questions about this! I talked to the District Attorney's office to explain the law. It does come...

Posted by Michael Schwanke on Wednesday, February 26, 2020

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