7

A recent comment on this site suggests it's “it is illegal to sell goods at different prices depending on the payment method used” in the UK. Yet, all low-cost airlines in Europe seem to do it. In particular, I am frequently flying with EasyJet (out of continental Europe) and I think they are UK-based so presumably bound by this rule.

If that is correct, how does that work? Is there an exception for services or online sales? Are they just blatantly breaking the law?

  • You forgot the most likely and correct explanation, which is that the comment to which you refer was in error. – Mike Scott Aug 18 '17 at 7:11
  • @MikeScott True, I edited the question slightly to allude to that possibility. – Relaxed Aug 18 '17 at 9:17
  • Please note that it is not illegal to offer discounts based on payment method or anything they like, which is used to circumvent any such rules. – user45830 Aug 18 '17 at 14:00
9

At the moment, they're allowed to pass on the actual cost of taking a card payment, i.e. typically the charge their card processor makes to them. From January 2018, all surcharges will be banned.

http://www.bbc.co.uk/news/business-40648641

  • I'm not sure how the UK legislation is set up, but one way around it in the US used sometimes is to offer a discount for paying in cash. I'm sure Ryan Air in particular is busily searching for a way to preserve the surcharge. – Eric Aug 18 '17 at 11:40
  • The article makes it sound like currently, surcharges are allowed to exceed the actual cost of taking a card payment. Take away the surcharges and if you are not using the best rewards card (most expensive to process) then you're just paying more on everything, but at least prices are what you see. – Hart CO Aug 18 '17 at 12:55
  • When I lived in New York, there was a law that it was illegal to charge extra if a customer used a credit card, but you could give a discount for cash. So instead of saying the price is, say, $10 but there's a $1 surcharge if you use credit, the store could say that the price is $11 but there's a $1 discount if you use cash. That law seemed a little silly to me. I suppose there might be some psychology to what the posted price is. – Jay Aug 18 '17 at 13:42
  • @Jay It wasn't a law, just a rule that every credit-card company put in its merchant agreement. – chrylis -on strike- Aug 18 '17 at 14:44
  • @chrylis According to this article, usatoday.com/story/news/politics/2017/01/10/…, there's a law. Maybe there are details here, not something I want to get into a big debate about. – Jay Aug 18 '17 at 16:21
2

Yes, at the moment the UK allows merchants to pass the merchant service charge element on to the consumer, but NOT to profit from it. Those that do are breaking the law. From 2018 though, merchants will have to charge everyone the same price.

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