A consumer financial advice website reports a large number ofmerchants in California and other states have begun surchargingand/or demanding minimum purchases amounts for debit card use.

GoBankingRates.comreported that large numbers of ARCO filling stations in Californiacharge 35 cents for consumers to use a debit card and subsequentinvestigation revealed that the 35-cent charge is not a matter ofindividual ARCO stations charging the fee, but a matter of ARCOpolicy.

A frequently asked questions file on the gasoline vendor'swebsite explains this way:

“In an effort to balance the customer's need for convenience andvalue, PayQuick terminals are available on our islands,” ARCOwrote. “PayQuick is an easy way for customers to pay for their gasusing cash, debit cards, PumpPass or GasPRO Plus Cards. There is a35-cent processing fee for debit cards only, in addition to anyfees your bank may charge for this service. For all othertransactions there are no additional fees. This allows ourcustomers the flexibility of using a debit card.”

California law and rules from both Visa and MasterCard bothforbid surcharging debit card usage but allow merchants to offerdiscounts for using cash instead of credit cards. ARCO doesnot accept credit cards in its California stations, but said it haslaunched a pilot program with stations in the Seattle area that hasselect ARCO stations both removing the 35-cent fee and acceptingcredit cards.

GoBankingRates.com also documents similar surcharges atconvenience stores and other retailers and attributes theirproliferation to retailers taking advantage of consumer confusionover what cards they are using and how that use is regulated.

Neither BP, which owns ARCO, nor Visa have yet commented on thesurcharging policy.