The debate over surcharges on credit card and debit card purchases has been an ongoing point of contention for quite some time now. Whether it should be allowed largely depends on what side you talk to, the business owner or the consumer.

Following a legal dispute that went to the Supreme Court in 2017, Maine became one of the four states in the country where it is illegal for a business to require a surcharge. But there is one exception that has ruffled a lot of feathers, especially small business owners here in Maine.

According to News Center Maine, Curtis Picard, president and CEO of the Retail Association of Maine, stated the following:

"The state of Maine gave themselves permission to allow a surcharge, so when you go to your town office to pay your property tax or car registration, when you're paying with your credit or debit card, they are allowed to have a surcharge," Picard said. "The same goes for the university system: If you can charge tuition to a frequent flier mile credit card, the university is allowed to surcharge."

 

So, if you were reading this article and wondering why you are charged an extra fee when you get your car registered or another service offered by the state (although seemingly hypocritical), now you know why.

As a consumer, this enactment is ideal as many people nowadays don't carry cash on them, or may choose to use a credit card to earn points for cash back, travel, and other perks.

As a small business owner, this has significant impacts, especially as many of them are operating on thin profit margins and making it difficult for them to remain competitive. This has may require them to reevaluate their pricing strategies, which may also may lead to a ripple effect by affecting both business owners and consumers.

The law, however, does allow businesses to offer discounts for cash payments, but it must be prominently advertised for all customers to see, which you've likely seen at gas stations offering such discounts as 10% off each gallon when paying cash or paying through a gas saving account such as an Irving Rewards account or Smartpay Rewards, offered through Cumberland Farms.  

According to News Center Maine, each swipe of a credit card costs retailers 3% of the transaction, which adds up quickly over time.

News Center Maine also stated that according to Visa, credit and debit card purchases are only illegal in Maine, Massachusetts, Connecticut, and Oklahoma.

It appear that this legal battle is continuing, and the resolution will likely depend on a balance between supporting businesses and protecting consumers.

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