Gov. Arnold Schwarzenegger has vetoed a bill that would have banned merchants from charging fees on debit card purchases.
The bill, SB 933, by Sen. Jenny Oropeza, D-Long Beach, would have banned surcharge fees that merchants sometimes impose when customers use debit cards. These charges, which range from about 40 cents to 75 cents per transaction, help merchants recover the cost of processing fees levied by banks and credit card companies.
Similar surcharges on credit card transactions were banned under a state law nearly 20 years ago.
Debit card surcharge fees are typically found at mom-and-pop retail outlets. One major retail chain, BP Arco, also levies the fee at its service stations; it opposed Oropeza’s bill.
Consumer groups contended the surcharges are unfair because they are tacked on after a customer buys a product. At some stores, when customers learn about the surcharges, they switch to credit cards or cancel their purchase altogether.
But in his veto message Wednesday to legislators, Schwarzenegger said that banning debit card surcharges would force merchants to raise prices for all customers to cover the bank processing fees. “The burden of paying these surcharges should fall on those who use debit cards and not on those who choose to pay with another form of payment,” he wrote.
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