HONOLULU (KHON2) — More local businesses are adding swipe fees to credit card purchases.
It is a trend that is growing statewide and KHON2 spoke to some retail and business experts to discuss what it means for customers.
Hawaii residents have come to expect about a 3% extra charge at certain restaurants when they pay with a credit card, but the trend is spreading.
“If you go get your car fixed, or you buy a t-shirt or, you know, wherever you go, those type of places could, even your local nail salons now we’re seeing too, massage places,” Retail Merchants of Hawaii president Tina Yamaki said. “When you use your credit card, they charge you back what their swipe fee is.”
The fees are not just on small ticket items. The City and County of Honolulu applies a 2.35% service fee for debit and credit payments on Department of Motor Vehicle transactions — Servco charges a 2.5% fee for payments charged to credit.
Some cards have fees as high as 4% and the Better Business Bureau said customers should keep some questions in mind.
“‘Maybe I want to pay with cash for this item or have a conversation with the business owner about maybe there’s a discount involved if I if I pay with cash. Those are business to business, very unique situations,” said BBB Northwest and Pacific Chief Innovation Officer Dale Dixon.
Hele Gas stations have offered discount on buying fuel with cash for years and said credit card companies typically add a 2-3% fee on charged transactions.
“We’re locked into those fees, and so those fees end up being passed on to the consumer,” said John Peyton, PAR Hawaii vice president of retail. “So for us, it’s really creating optionality for customers and really trying to build a loyalty. If there’s a value to a consumer in a cash discount, then we’re happy that we can provide that option to them.”
The BBB said trustworthy businesses should tell customers about extra fees on cards before the purchase is made, but it is only required to be shown on the receipt after the purchase.
“And that’s why we think transparency is so important. So does a business pass on the cost directly to the consumer? Do they build it in to the pricing strategy that they have for their products and services?” Dixon said.
“Now with everybody having tap and pay and nobody using cash or checks that much anymore, the swipe fees have gone up because more and more people are using credit cards,” Yamaki said.
Click here for more tips on how to detect new or hidden fees.