A Surcharge For Using Your Credit Card to Pay Hotel Bill?

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?

Sleep Inn Beaver - Beckley

Photograph ©2019 by Brian Cohen.

“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

Sleep Inn Beaver - Beckley

Photograph ©2019 by Brian Cohen.

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.

12 thoughts on “A Surcharge For Using Your Credit Card to Pay Hotel Bill?”

  1. Chris@Oak says:

    The 4Points in Auckland has the C.C. surcharge (add 2%) on their website.

  2. I agree with you about having cash to pay for your hotel services. That should an option for people with cards or for those who have cash. I also hate the merchant fee. I really don’t know what for.

    1. Mike says:

      I don’t think any hotel would or could ever refuse a cash payment im sure many low budget motels use cash ALL of the time as well as many people that want to stay private and hide things. I can still remember back in the day pre 2008 I never had a card used to take road trips pay everything with cash. Hotels used to make guest leave a cash deposit and returned it after they visually checked the room for damages before check out. These days it’s just much easier and quicker to put holds on CC and charge you for damages long after we check out if the maid finds anything while cleaning the room. I once had a hotel charge me for a bath robe 3 days after checking out, it was never in the room to begin with nor do I ever use a robe, after calling the hotel to dispute it they removed the charge.

      But.. I also do not agree with the surcharge sounds like all businesses are finding creative ways to milk a few more $$ out of customers anyway they can. Reminds me of the story of the 1 cent thief years ago bank teller was stealing a few cent from everyone using rounding for years nobody ever noticed and she ended up with over 1 million dollars.

      1. I really like your opinion on this especially on the story of a 1 cent thief. I hate this fact thou.

  3. Scott says:

    You can (depending on the state) charge a convenience fee for using a CC if it’s not your primary method of accepted payment; with hotels it is

    1. Jim says:

      It doesn’t matter if it’s your “primary” method.

  4. Jimmy says:

    It’s a stupid fee, but if “about 3 dollars give or take” causes you to get “visibly upset”, you might need to reassess life a bit.

  5. Barry Graham says:

    I don’t think there should be a discount for cash, that’s the same as adding a surcharge a surcharge for credit cards. The only way to absorb the fee to avoid charging a surcharge is to charge the same price for everyone. There are also hidden costs in accepting cash and hidden savings in accepting credit cards.

  6. Terry says:

    Who the heck brings wads of cash to pay for hotels? Even if your room is prepaid, everyplace I’ve stayed even demands a cc for “incidentals”.

    1. Mike says:

      Only drug dealers and those having side affairs pay in cash only to leave no trails 🙂

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