Residents were notified by the Sedgwick County District Attorney’s Office about a new Kansas legislation change that may have an impact on their everyday purchasing patterns.
Businesses in the state are permitted to impose a surcharge on credit card transactions, “so long as clear notice is given to the customer before the sale,” according to a January 1 advisory from the Sedgwick County DA’s Office’s Consumer Protection Division.
A state law was amended, according to the DA’s office, “to allow any person or retailer offering sales, services, or lease transactions to impose a surcharge on credit card payments, as long as the amount of the surcharge is disclosed through a ‘clear and conspicuous notice to the customer at the point of entry or the point of sale and in advance of such transaction”
“Before this change in the law, Kansas had what amounted to a ban on surcharges, allowing only for cash discounts on sales. In 2021, however, the ban was held to be unconstitutional in a federal case, finding it was a violation of the First Amendment,” according to the DA’s office.
Derek Sorrells, an entrepreneur and business owner from Wichita whose endeavors include Papa’s General Store, Just a Sip, and The Arcade, stated that the additional fee might benefit his company in the long term.
“Not without credit cards, but with debit cards too, we are usually charged 3.5%. So on every $100, we’re losing $3.05,” Sorrells stated. “And over the course of the year, it adds up to a significant amount of money.”
Although the new state law makes no mention of debit cards, it is still illegal to impose a levy on debit cards in any of the 50 states under federal law.
According to the DA, “Similarly, because Kansas state law has no maximum surcharge, the maximum allowed in Kansas is capped by federal law at 4%.”
“It’s the majority of the payment nowadays, and I have a lot of credit card customers,” Sorrells stated.
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According to Derek Burrows, who has owned The Burrow for over 13 years, there are drawbacks to using a credit card, such as the potential for cashback.
“The cashback comes from the store you bought it from. It’s not the credit card company giving up a percent,” he stated. “It’d be nice if fees were lower. If a store needs to raise prices to cover that, I’m sure they will.”
Sorrells and Burrows highlighted their emphasis on ensuring that their clients desire to return.
“First off, I don’t want to add a charge to my customers,” Burrows stated. “It’s a whole other level of confusion, and so many shop almost exclusively with a credit card that it would be a burden on them.”
Businesses would probably react differently to the surcharge shift, according to Sorrells.
“I think more businesses now that they can do it, will absolutely do it. But I think you’re also going to see many businesses try to stay away from it,” he stated. “One of the things as small business owners, what we’re trying to do is try to get more customers and keep those customers, so I think you’ll see a lot of people steer clear of that.”
