Pls help me understand these debit card fees

[alien_host]

I have a checking account for DD's girl scout troop. I've been using the debit card to pay for small things like craft supplies, snacks etc. I keep getting charged a 35 cent "Point of Sale fee". This has been charged at Target, AC Moore and supermarkets. I asked the bank about it and they said it's a charge from the store, not the bank.

Honestly I don't use a debit card for our personal banking. Is this normal? I'm trying to save the troop as much money as I can and these charges are driving me crazy.

The lady at the bank said to run it as a credit card vs debit but that isn't working. Also it makes little sense to me since isn't it better for stores to take a debit card (no 3% credit card fee)?

it is Citizens Bank, if that makes any difference. ETA - I don't use this bank for my personal banking either since they offered the best no monthly fee package...supposedly.

Any thoughts? I could just pay for the stuff, keep receipts and reimburse myself but I was trying to save money by not buying checks. We have some starter checks. I could look into online bill pay but that really is more trouble than I had hoped. It's pretty convenient to use the debit card.

TIA!

[vonfirmath]

That's weird. I use my debit card all over and don't get charged point of sale fees.

I would tend to blame the bank. But since the bank says these other places are charging it, I would be tempted to go to Target, show them the fee and ask them. When they say "That's ridiculous" you can go back to the bank and says "Nope, Target isn't charging them, but yet I was charged. Help me figure this out"

[alien_host]

That's weird. I use my debit card all over and don't get charged point of sale fees.

I would tend to blame the bank. But since the bank says these other places are charging it, I would be tempted to go to Target, show them the fee and ask them. When they say "That's ridiculous" you can go back to the bank and says "Nope, Target isn't charging them, but yet I was charged. Help me figure this out"

That's a good idea. I forgot to mention that it is a "small business" account. that's what the bank said I needed to open b/c it was a group - maybe that is triggering it. The PITA thing is that this isn't my regular bank so I don't really have a relationship with them (and so little money there). I'll have to go back in and try and get someone else to help me. Maybe the other person was wrong. But it is inconsistent, I was charged for some transactions, but not others. Seemed linked to the store.

Could it be related to the $ amount? Most of my purchases are $10 or less.

[lhafer]

That's strange. Usually it's the credit card that's charged, not a debit card, and that charge doesn't go to you, but the business where you are doing the transaction. I am not familiar with your bank though. I would def. follow up!

[DebbieJ]

When I lived in Southern California, some merchants would charge those POS fees. I remember one gas station doing it.

Your girl scout troop is non profit, right? Then a small business account is not the right kind of account for you.

[daisymommy]

I'll ask my DH when he comes home. He works in upper-management for a bank.

[alien_host]

I'll ask my DH when he comes home. He works in upper-management for a bank.

Thank you!

DebbieJ - it is non-profit. I'm not sure why it was set up this way. I should try and ask a troop leader from another troop.

[daisymommy]

Update:
Talked to DH. He says it's the bank. Stores don't charge POS fees anymore, they add a few cents onto the price of every item to cover their costs of offering "merchant services" --electronic payment systems. He said some gas stations still do charge though.

DH says almost all banks used to charge a small fee for each debit card transaction, but customers hated it and so nearly all banks changed and make their money in other ways, through other fees. Remember, banks are businesses too, and must pay employees, for overhead costs, business costs, etc. Nothing in life is free. So there are fees and revenue built into other things in banking.

But apparently some small time/small town banks still charge POS fees each time you use their debit or credit card because they haven't gotten in the swing of things and changed.

Dh says you would be much better off switching banks to a larger bank with a free debit card program.

Hope that helps!

[MSWR0319]

We bank at a large bank in our area and they charge a fee very time you use your debit card as debit card. But if you use it as a credit card they don't charge you. Not sure what the point is to use it as a credit card other than you get no fees!

[alien_host]

Update:
Talked to DH. He says it's the bank. Stores don't charge POS fees anymore, they add a few cents onto the price of every item to cover their costs of offering "merchant services" --electronic payment systems. He said some gas stations still do charge though.

DH says almost all banks used to charge a small fee for each debit card transaction, but customers hated it and so nearly all banks changed and make their money in other ways, through other fees. Remember, banks are businesses too, and must pay employees, for overhead costs, business costs, etc. Nothing in life is free. So there are fees and revenue built into other things in banking.

But apparently some small time/small town banks still charge POS fees each time you use their debit or credit card because they haven't gotten in the swing of things and changed.

Dh says you would be much better off switching banks to a larger bank with a free debit card program.

Hope that helps!

Thank you, I'm going to go to the bank again and ask/get it straightened out.

[kijip]

When I lived in Southern California, some merchants would charge those POS fees. I remember one gas station doing it.

Your girl scout troop is non profit, right? Then a small business account is not the right kind of account for you.

Non-profits usually have business bank accounts. Very few banks offer special services for non-profits and if you are opening an account with a tax id number vs a personal ss number, most banks will want you or even require that you set up a business account. Non-profits by definition are corporate organizations and share more in common with a business than a single person.

[pharmjenn]

Don't some business accounts (and probably personal as well) have limits to how many free transactions you get per month? Could that be it? Like you get 5 atm/debit transactions then are charged after that?

[alien_host]

I went to the bank and got somewhat of an explanation. Apparently, at this bank anyway, they charge a fee if you use it as a debit card (b/c it is a business acct). The person who told me the stores were charging it was wrong.

I was told today to use it as a credit card. So swipe and when it asks for a PIN, hit "OK" (green button) and it should go through w/out the bank charging fees. This makes no sense that you can by pass the PIN though, isn't that the point of a debit card - that it is protected by a PIN?

I told them that I thought it was very confusing since it is a DEBIT and not a credit card (and says it on the card). Anyway I requested that they reimburse the troop the $2-3 that has been charged. This is not now they explained it to me when I opened the account. I asked if there were charges for debit card use and they said no. I opened the account in October. I guess I'll wait and see if they reimburse the charges.

I was told that b/c the tax ID number used is the Girl Scout Council that it has to be a business account. Our Council actually recommends this bank since they don't charge a fee w/out a minimum balance.

Thanks for the input.

[daisymommy]

FWIW...nearly all debit cards are combo debit/credit cards, even though they all come out of the checking account, not get put "on credit" so to speak. Don't ask me why! LOL!

I have figured out that credit transactions take 24 hrs. to process, while debit charge come out immediately--at least through our bank.

Anyway, glad you got it all figured out!