Caveat emptor, credit card users!

Since Sunday, retailers in most states — though not Kansas — have been allowed by credit card companies to tack on a fee for shoppers who choose credit.

Some large retailers have said they won’t add the fees, and a retail industry group said warnings of such fees amount to “propaganda on the part of the card industry.”

Consumer advocates, nevertheless, urge shoppers to stay alert.

“As soon as one of them starts, then everyone will do it,” said Jana Castanon, community outreach coordinator for Apprisen, a consumer credit counseling service.

At issue are the fees that Visa, MasterCard and the banks that issue their cards charge merchants each time a customer pays with a swipe of a card. The amount typically ranges from 1.5 percent to 3 percent of what you buy and offers protections for retailers against fraud or non-payment.

Historically, card companies have prohibited retailers from asking shoppers to cover those fees when they shop. It meant shoppers paid the same regardless of how they paid, which helped make credit cards more popular.

And it left stores to work the cost into their prices, just as they cover their light bills.

Retailers, however, sued seven years ago. They contended that the card companies and major banks conspired to fix the charges, called interchange fees.

In a settlement, which has preliminary court approval, the card companies lifted the ban on retailers’ ability to add a surcharge when shoppers buy with a credit card. The change took effect Sunday.

Many large retailers, including Wal-Mart, Target and Macy’s, have said they won’t add surcharges to credit card shoppers, according to Bloomberg News.

The lawsuit and settlement do not apply to debit cards.

The large retailers’ pledge may make it difficult for other retailers, including small shops, to start charging the card fees and still compete.

Retailers did not ask for permission to start charging shoppers and won’t add surcharges, said J. Craig Shearman, vice president of government affairs for the National Retail Federation in Washington.

“The settlement is by no means settled,” Shearman said.

Shearman said the settlement was written largely by card company lawyers and seeks to turn card industry fees into retail fees. The lawsuit, he said, sought lower fees through competition and greater awareness by shoppers that credit cards triggered extra costs.

The card industry counters that retailers in Australia started levying the fees under similar circumstances.

Surcharges on credit card purchases became possible there in 2003, said Trish Wexler, a spokeswoman for the Electronic Payments Coalition, whose members include Visa, MasterCard and banks that issue cards.

“No one did it at first,” Wexler said.

Slowly, companies in some industries began to charge the fees, and they have since become widespread, Wexler said.

Shearman disputed the characterization of what happened in Australia and said it wasn’t relevant to U.S. retail markets a decade later.

Still, U.S. consumers can be alert to whether they’re being asked to pay a fee.

The settlement requires retailers who pass along the charge to say so, according to Consumer Action. It created a brochure on checkout fees in partnership with the Electronic Payments Coalition.

The brochure said merchants must post a notice of the fees at the store’s entrance, at the point of the sale, whether that is a cash register or online, and on the customer’s receipt.

Consumer Action said the receipt should show the amount of the fee, state that the merchant is imposing the fee and declare that it doesn’t exceed what it costs the merchant to accept credit cards.

The amount of the fee can vary depending on the fee the store pays, with smaller stores typically being charged more. Consumers can’t be asked to pay more than 4 percent, Wexler said.

Consumers might ask for a discount if they believe the cost of the fee already is built into the price they’re paying, Consumer Action’s brochure suggested.

Shoppers won’t have to worry as much in Kansas, which has a ban on such fees, said Chuck Stones, head of the Kansas Bankers Association.

Stones added, however, that the law exempts public universities from the ban.

The bankers group is opposing a bill in the Kansas Legislature that would expand the exemption to private colleges and universities, Stones said.

Shoppers might be alert to other differences in cash versus credit transactions. The Kansas law, Stones said, allows a discount for cash payers, which some gasoline stations offer.

Shearman, with the retail group, said a discount approach by other retailers would help educate consumers about the cost of credit cards in the goods they buy.