Magazine article American Banker

Puerto Rico Authorizes Gas Station Surcharges

Magazine article American Banker

Puerto Rico Authorizes Gas Station Surcharges

Article excerpt

Puerto Rico's Department of Consumer Affairs has granted gasoline stations permission to impose a credit card purchase surcharge, which likely would violate the policies of the card companies.

Gas station owners have complained that rising prices have led to more competitive pricing that has squeezed their margins, so interchange fees are consuming a larger share of their profits.

Jesus M. Ortiz, a spokesman for the department, said in an interview Thursday that it heard from gas station owners who said that "they are losing money," and were considering either not accepting credit cards at all or accepting them only at their full-service pumps, where the prices are higher.

Last week the department said that gas stations could charge up to 25 cents on all purchases made with credit cards at self-service pumps. It refined the policy Tuesday, lowering the maximum surcharge to 20 cents and explicitly noting that the stations can charge the fee only on credit cards, not debit cards.

Only gas stations with both full-service and self-service pumps can charge the fee, Mr. Ortiz said, and they can do so only at the self-service pumps, and only for gas purchases of less than $10.

The policy will be in effect for 90 days.

After the department issued the first announcement, "gasoline stations started to charge 25 cents on debit cards," Mr. Ortiz said. "They started to send the consumers to the full-service pump and also charged the 25-cent charge. The moment we knew that, we changed the order."

Puerto Rico's policy appears to contradict the contractual agreements that Visa U.S.A. Inc., MasterCard Inc., and their issuing banks have with merchants. The agreements typically do not permit surcharges on credit card purchases.

However, the department's secretary, Alejandro Garcia Padilla, told The San Juan Star that orders by government agencies trump private contracts. …

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