If you’re like most retailers and restaurant owners, you have a “love-hate” relationship with  credit and debit cards. While accepting “plastic” likely increases your sales by giving customers more purchasing flexibility, it also comes with a downside in the form of transaction costs paid to credit card issuers. Fortunately, new federal regulations ease the burden.

Notably, while merchants were once required to charge consumers the same rate no matter the payment vehicle, a recent settlement among the U.S. Department of Justice, Visa, and MasterCard lets them offer their customers discounts tied to specific payment vehicles. For example, a retailer who is tired of high credit card processing fees might tout a discount of 1 percent to customers who pay for their purchases or settle their tabs with a debit card rather than a credit card. One caveat to remember here: You must clearly and conspicuously post your payment incentive policy at the point of sale and provide the discount to all customers. Discriminating based on card brand or issuer is not permitted.

Additionally, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress in 2010, retailers and restaurant owners can set minimum price levels for the use of credit cards in their establishments. The minimum must be under $10. Why bother? The transaction fees operators pay to process really small purchases—say, below $5—essentially cancel out the profit from the sale.

Further, as you are aware, you currently pay an interchange fee each time you execute a transaction in your store or restaurant; this is in addition to the processing fee mentioned above, The Durbin Amendment, a last-minute addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act that is slated to go into effect in July, calls for putting a cap of 12 cents apiece on interchange for debit-based transactions. This will be a boon to the independent retailer and restaurant community, as U.S. interchange fees currently average 1.6 % in the U.S. Small retailers pay up to 3%.

Much of merchants’ positive or negative experienced with debit and credit cards hinge on having in place the proper point of sale hardware, such as the newly updated Version 1.5 of  pcAmerica’s Cash Register Express and Restaurant Pro Express, as well as a viable payment processing solution. For more information, visit www.pcamerica.com.