A report recently surfaced of a hotel property in the United States at which a guest found a fee of approximately three percent on the final bill at the conclusion of the stay — simply for using a credit card to pay for a stay.
A Surcharge For Using Your Credit Card to Pay Hotel Bill?
“i just checked out of the home 2 suites at KCI- Kansas City airport, yesterday Sunday June 14, 2020, and they tried to charge me a Merchant Processing Fee, their fee that they pay to use Credit Cards with, now the catch is, they will not let one check in with cash. I think this is highly un ethical and borderine illegal…” is what FlyerTalk member kctigers posted in this discussion on Monday, June 15, 2020; and the quoted text is unedited. “they put it on my printed receipt and it said merchant processing fee, about 3 dollars give or take, which is about 3 % give or take of my charges, was not a hilton credit card, that is when i first found out about it and they then took it off, but i was visibly upset.”
Although the merchant processing fee was ultimately removed from the folio upon request, the precedent of charging a fee for using a credit card to pay for a lodging stay was implemented greater than ten years ago by the federal government of Australia. Back on Monday, March 22, 2010, this short article referred to a new fee of 1.5 percent at hotel properties in Australia applied to the invoices of guests when paying at the front desk with credit cards. This fee would reportedly be waived only where there is no option to pay for the stay at a hotel or resort property with cash — such as when buying an advance purchase room rate.
The Competition and Consumer Amendment (Payment Surcharges) Act 2016 — which became effective as of Thursday, February 25, 2016 — amended the Competition and Consumer Act 2010 with the insertion of a new part which bans excessive payment surcharges. This means that companies which violate the law by charging consumers excessive credit card fees will be fined significantly. The limit will be linked to the direct costs of the payment method — such as bank fees and terminal costs as two examples. Surcharges are considered excessive when they exceed the permitted amount of the surcharge in the standard or regulations. Companies could be subjected to pay as much as $1.1 million for breaching the new law if court action is necessary.
Summary
I have no statistics readily available; but I would bet that a substantial number of guests pay for their stays at hotel and resort properties with credit cards rather than with cash, which would leave me to believe that adding a merchant processing fee that credit card companies charge businesses to the folios of guests will not change the base room rate — meaning that the total charge would effectively be an increased cost for a stay in favor of the hotel or resort property which passes along that fee with no appreciable benefit for the customer.
Merchant processing fees should remain as a part of the base room rate — especially as guests have generally been used to that custom of payment for decades. Rather, hotel and resort properties should instead offer a discount of three percent to guests who pay for their stays in cash and therefore avoid the merchant processing fee, as that would be the fair thing to do, in my opinion.
Hotel and resort properties may be hurting significantly financially as a result of the current 2019 Novel Coronavirus pandemic — but that does not give them license to randomly add fees and charges to the final bill, as that is a way to keep advertised room rates deceptively low and erode the trust that guests automatically have in them…
…especially if the customer is not informed with advance notice that the fee will be added to the folio at the conclusion of the stay.
I certainly hope that this does not portend a precedent for a wave of hotel and resort properties to add merchant processing fees to the folios of guests in the future.
This is not the first time a hotel property attempted to sneak a fee or surcharge on the final bill when a guest is checking out, as a charge of $1.50 for what is identified as Safe w/ltd Warranty was added to the bill at the conclusion of my stay at a hotel property several months ago…
All photographs ©2019 by Brian Cohen.
