$1.00 Fee to Get Cash Back

[mysticide]

My question involves a consumer law issue in the State of: Federal Law and Tennessee Law.

I tried to search this question out but the only results that show up is the wrong type of "cash back" that I'm interested in.

The type of cash back that I'm interested in is using a debit card: Is it illegal to charge a monetary fee to receive cash back at the point of check out at a store that offers cash back when you make a purchase?

Some stores offer that function and some stores don't but I came across a store for the first time that is charging a $1.00 fee to get cash back. It's on the receipt but the party receiving the money is not identified so I asked the cashier and she said, "I don't know, the software updated last week and the fee started appearing."

I contacted my bank and they said: "... we do not assess fees for initiating a cash back on your transactions. The cash back fee in the amount of $1.00
was from the merchant. Please contact the merchant for additional details reagrding this fee. ..."

I have never seen such a cash back fee before as I have engaged this function countless times. I already read somewhere last year that when a person swipes their debit card at the register, regardless of whether the customer receives cash back or not, the bank charges the store around .50 fee for that transaction.

Here's a refresher on that:

Debit cards' $20B issue Merchants, banks' bitter DC battle over swipe-fee cuts.

http://www.nypost.com/p/news/busines...v41WBMG5EWeaCL

This fee charged to the retailer doesn't appear on the receipt but is is behind the scenes between the bank and the store but this $1.00 cash back fee is on the receipt and is a separate thing.

Getting cash back does NOT cost the retailer any extra expense that would be above and beyond the card swipe fee because the bank sees the incoming bill for the transaction as a whole that includes the cash back just the same as if the cash back were some item purchased.

The fee the bank charges the store for each debit card swipe is the same regardless if the customer gets cash back or not so why is the store charging $1.00.

Is the retailer providing unregulated financial services?

The $1.00 cash back fee charged by the store is far and beyond the fee that the bank charges the retailer for that debit card transaction.

Is this illegal or is the store just being greedy and opportunistic?

The way this works out, the retailer is charging a fee just like an automated teller machine would. It seems to me that a fee charged by a retailer so that the customer can receive cash back is something that could be and if not should be regulated. $1.00 to receive cash back is outrageous when in fact the store is not charged a fee by the bank for this and does not cost the retailer so much as $00.01 extra. I think it is unfair for it to be illegal for a retailer to charge fees like this on a credit card purchase but can do it to a debit card purchase.

I haven't mentioned the name of the retailer since I didn't want to do that in the first post but if a moderator says OK I'll say which retailer it is. According to their website they have over 6,000 stores in 44 states.

Using their sites site map I looked at every web page they had to offer and can't find even one public notice about this new fee that is charged for cash back.

I find nothing about this in search engines so does anyone know what's going on with this?

[flyingron]

It's not illegal nor is it against most merchant's agreements to charge a fee for cash back on debit as long as it's disclosed.
As for the reasoning, what makes you think they have to give you a reason? The reason can be that "they can" or they're amortizing the risk of offering that sort of transaction.

[PandorasBox]

Do they have anything posted at the registers?

If not...I would write your state's Attorney General and ask they require stores to post such notice.

If I use an ATM in Michigan that is not my bank's, I know I can be charged a fee, and it is posted on the ATM machines.

[mysticide]

Do they have anything posted at the registers?

If not...I would write your state's Attorney General and ask they require stores to post such notice.

If I use an ATM in Michigan that is not my bank's, I know I can be charged a fee, and it is posted on the ATM machines.

No notice is posted. The only notice that appears is on the digital readout of the card swiper. I didn't notice it the first time last week but I did catch it this time when I got cash back again.

I didn't catch it the first time because this function is all a set routine of events, select, push buttons, swipe card and go so it is easy to slip that fee in without warning because of the established routine.

I don't mind paying the dollar but this can get past a lot of people as it got past me by slipping it in unannounced. They could beat each person for $1 at last once before they catch on and decide to pay it voluntarily or decline.

There really needs to be a public notice of this new fee at the register in advance of swiping the card.

[PandorasBox]

...and that is why I suggest you write your State's Attorney General to suggest this notice be posted on the registers

It takes people like us to make these things happen

[markx]

most credit card banks charge the retailer a percent fee on the total dollar amount, so acually the retailer is sometimes probably loseing money if you want to much back that exceeds the percent amount they got charged by the bank. most credit card banks charge 2 to 3 percent on the dollar.

[aaron]

A cash advance isn't a purchase. Credit card companies make lots of money on cash advances because they start to charge interest from the date of the advance.

[KeyWestDan]

You can NOT get a cash advance at a cash register in a store!

A cash back is from funds you already have, it is done with a debit card.

You have to go to a credit card terminal or into a bank to get a cash advance on a credit card.

They are NOT the same thing and the rules, what there are, are very different.

It is not illegal to charge a fee on cash back at the point of purchase. It is just stupid and greedy.

Cash back is offered as a service by the store. Using a debit card does them a big favor. If you use a credit card or use a bank card as a credit card, the store pays a discount rate or fee that is a percentage of the purchase anywhere from 1.5 to 3.0 percent. That really adds up during the course of a day at a grocery store or any busy store. The store does not pay the same with a debit card.

I agree that any store doing such a thing should be required to POST a prominent notice, and it MUST also appear on the terminal. If it is not displayed on the terminal, and your permission is not asked with a yes or no button (like fees for using an ATM) then I would argue it is FRAUD and illegal.

Printing it on the receipt AFTER the transaction is NOT a cure to the original fraud. It is NOT a defense.

I would file a complaint with consumer protection and the attorney general. Then I would RUN and find a good class action attorney to file a class action naming you as a lead plaintiff against the store. The lead plaintiffs always get big bucks behind the attorneys. Other members of the class will get a gift certificate or some crap like that.