Swipe to pay: How retailers could be conning you

How often do you check your receipt after having your debit or credit card run at a point-of-sale machine?

Many shoppers are likely to just pull out their plastic money cards and not think about the charges on the receipt. Well, as we found out, you could be losing money through unauthorised charges. 

Money has learnt that shoppers are being subjected to additional charges by some shop owners in what they claim to be a practice aimed at protecting their profit margins.
Ms Emily Kaiga, a corporate communications officer at Standard Chartered Bank, was once a victim of such charges. 

Several other local shoppers have suffered the same exploitation, especially in high-value transactions. 

According to contractual agreements between shop owners, often referred to as merchants in plastic money circles, and acquiring banks (the owners of the point-of-sale machines), shop owners should pay a commission to the respective bank as interchange fee for running a debit or credit card on the bank’s machine.

Additional charges
This is the additional charge that might have been subtly imposed on your card as shop owners shield themselves from parting with huge commissions to banks, given that the fee depends on the value of the transaction.

“According to our operating rules, only the transaction amount should be charged on customers. They should not pay anything above that,” said Mr Victor Ndlovu, Visa’s business development manager for East Africa. 

According to Mr Ndlovu, the main reason cards were introduced was to encourage the use of plastic money and reduce reliance on cash transactions that often expose shoppers to the risk of losing money through theft and other vices associated with carrying cash.

However, he admitted that shop owners have taken advantage of unsuspecting shoppers and are now turning the platform into cash cows at the expense of their clients.

This practice, according to Mr Ndlovu, is threatening efforts to promote the use of plastic money despite the fact that the mode of payment is relatively safe compared to carrying cash in shopping malls.

“By so doing, merchants think that they are protecting themselves against costs, but in real fact, they are discouraging the use of plastic money. 

“We have a universal process and procedure that indicates the manner in which merchants should conduct themselves and it also provides for punitive measures to be taken in case we suspect such a thing is happening,” said Mr Ndlovu.

Collusion
The illegal practice is growing and judging by the response we got from a member staff who spoke anonymously at Kenya Commercial Bank’s Card Centre, local banks could also be having a hand in it.

The employee told Money that Visa requires customers not to pay anything for running their cards on point-of-sale machines. 

However, this is allowable only if the shop owner discloses the intention to make an extra charge before running the card.

Daily Nation