The impact of AB 2695 on California law would be significant, shifting the landscape of consumer payment options and retailer pricing strategies. Retailers would now be permitted to add surcharges on credit card transactions, which could lead to increased costs for consumers who prefer using credit cards over cash or checks. While proponents argue that this flexibility supports local businesses by allowing them to offset fraud and transaction handling costs, critics express concern that it may disincentivize credit card usage and disproportionately affect low-income consumers who rely on credit cards for their purchases.
Assembly Bill 2695, introduced by Assembly Member Quirk, seeks to amend existing regulations regarding credit card surcharges imposed by retailers in California. The bill intends to repeal current prohibitions against retailers charging surcharges for credit card payments, allowing them to impose fees under specific conditions. This change aims to enable retailers to recoup costs associated with card transactions, which can be substantial, particularly for small businesses that face growing credit card processing fees. The legislation establishes that the surcharge cannot exceed 3.5% of the transaction amount or the reasonable cost incurred by the retailer, whichever is lower.
Notable points of contention surrounding AB 2695 include concerns about consumer transparency and fairness in pricing. The bill requires that retailers notify consumers of the surcharge before completion of a transaction, but opponents fear that this requirement may fail to fully inform consumers of the financial implications of their payment method. Additionally, the exception for utility payments could lead to further complexities in consumer pricing structures. As such, debates continue over whether the potential benefits of cost recovery for merchants outweigh the possible negative effects on consumer choice and spending behavior.