Extra Charges for Non-cash Sales

One result of the Monopolies and Mergers Commission inquiry into credit card services was the decision to end the credit card companies "no discrimination rule". Previously under this rule, traders were required to charge the same price of purchases made with credit cards as for those paid by cash or other means of payment. Credit card companies may still require that traders charge no more for customers using their cards than the amount of the handling fee the credit card company charges the trader.

To ensure customers are not misled, regulations have been made setting out what a trader must do if he displays a price which does not apply to all methods of payment accepted.

Application
These regulations apply to anyone in business who gives to a retail customer an indication of a price for goods, services, accommodation or facilities and who charges different prices for different methods of payment, e.g. one price for cash and another for credit card payments.

Exceptions
There are separate regulations relating to the sale of motor fuel, the details of which are covered on a separate leaflet.

Requirements
Where a trader gives an indication of a price which does not apply to all methods of payment accepted by him he must:

(i) state the circumstances when that price does not apply.
(ii) state the difference in cash or percentage terms between the marked price and any other such price. 

For example, ‘credit cards 75p per transaction extra’ or ‘2% extra for credit cards’ or ‘2% discount for cash’.

How must the information be given?
Required information must be displayed prominently and clearly,

• at every public entrance to the premises and
• at every point of payment.     

A typical notice may read:

Traders may, if they wish, mark items individually with two or more prices. In this case, they do not need to display the price difference on the notices at the entrance of point of payment, but they would have to display the fact that different prices were charged in specified circumstances.

What about shops within other premises?
Kiosks or shops within other premises such as department stores or petrol filling stations should display any required information as if they were a separate premise. If that part of a shop or kiosk does not have a specific entrance then any required notice should be displayed in a conspicuous place. In any event, there should be a notice at every point of payment.

Restaurants
If any restaurant or other establishment selling food or drink charges different prices for different methods of payment then in addition  to the notices at the entrance and at the point of payment, the required information must be given on all menus.

Mail order goods
Advertisements for goods on sale by mail order or similar require the two statements about any price difference for different methods of payment to be given clearly and prominently in the advertisement or clearly indicate the price charge for each payment method.

Other advertisements
Advertisements stating prices for goods but not specifically or by implication inviting people to order goods, need not contain statements about different costs for different payment methods. It is sufficient just to specify the payment to which the price applies e.g. ‘Vacuum Cleaners £75 cash, cheques and Switch cards only’.

This leaflet has been prepared for the guidance of traders. It is necessarily worded in a general way and cannot cover every circumstance. It is not an authoritative interpretation of the law.

For further advice contact:- Warrington Borough Council, Trading Standards, Community Services Directorate, Palmyra House, Palmyra Sq Nth, Warrington, WA1 1JN

Tel No: 01925 442678 Fax: 01925 442655