Starting January 1, Kansas businesses have been granted the legal right to add surcharges on credit card transactions. This new law, however, has sparked mixed reactions among business owners and customers.
Why the Change?
Kansas had banned credit card surcharges since 1986. However, in 2021, this law was deemed unconstitutional, leading to the introduction of the updated legislation. Now, businesses can charge up to 4% extra on credit card transactions, but there’s a catch—they must inform customers about the surcharge before completing the sale.
What’s Allowed and What’s Not
While the law permits surcharges on credit cards, it remains illegal to impose similar fees on debit card transactions. This rule applies across Kansas and all 50 states.
Business Reactions
James Red, the owner of Red’s House BBQ in Columbus, Kansas, has chosen not to adopt the new surcharge option. For Red, keeping prices reasonable and fostering community connections takes precedence over increasing revenue.
“I think when people work hard and want to enjoy themselves, they’re already paying a premium. You shouldn’t nickel and dime them,” Red explained.
As a new business owner, Red prioritizes building strong relationships with his customers. “The lifeline of every small business is about togetherness, family, and community,” he added.
Impact on Customers
For consumers, the news of potential surcharges might come as an added financial burden. Businesses are required to clearly inform customers about these fees, but customers may feel discouraged from using credit cards, especially for larger purchases.
Looking Ahead
The introduction of this law gives businesses more flexibility in managing their operating costs. Credit card processing fees, which businesses typically bear, can now be passed on to customers. This could help small businesses reduce expenses while potentially affecting customer loyalty.
As the law rolls out, it will be interesting to see how businesses adapt and how customers respond.
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