DENVER –Colorado’s governor has signed into law a bill that will allow merchants to impose a surcharge for people who use a credit card to pay for sale or lease.
The bill adds that the max surcharge is 2%, "...or the merchant discount fee, which is defined as the actual fee that a seller or lessor (merchant) pays its processor or service provider to process the transaction."
Prior to passage of the legislation, Colorado law did not allow a seller, lessor or company issuing a credit or charge card to impose a surcharge against someone paying for a sales or lease transaction by using a credit card.
The new law requires consumers to be notified in some form showing the surcharge is present. It does not apply to cash, check or debit and gift card payments.
"If a merchant imposes a surcharge in violation of the bill, an individual consumer aggrieved by the violation may seek enforcement of the violation as an excess charge under the "Uniform Consumer Credit Code - Remedies and Penalties," reads a webpage the described the bill prior to its passage.
Charge is Optional
One sponsor of the bill, State Senator Roberto Rodriguez told 9NEWS the surcharge for a credit card transaction would be optional.
"This cost would be transparent and they have to post that this is being done when this charge is being incurred," he said, claiming that similar bills, in the long run, could help lower consumer costs. "...With competition, these prices could be dropped or it might incentivize people to use lower pricing for cash and or debit cards, which at some point maybe that would lower prices because like I said, these credit card costs are what is going into the overall cost to the consumers in general," he said.
Rodriguez told the news outlet he believes the bill could help save some businesses.
"I think trying to be proactive and not reactive is the best point to go. For me, this bill was always about giving smaller merchants the opportunity to recoup and not have to raise costs for everybody out of this. And that's why I got on this bill," Rodriguez said. "...We think that the cap of 2% is not allowing anybody to abuse this."
What Opponents Say
Opponents of the bill, including the Colorado Consumer Health Initiative, expressed opposition to the surcharge portion of the bill, saying the cost could add up for some that are financially struggling.