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auction, auctioneer, auctioneers, auctions, credit cards, debit cards, gift cards, merchant, processor, surcharge
We were one of the first auctioneers (1993) to accept credit cards at all our auctions including even on-site auctions with no landline phone service: https://mikebrandlyauctioneer.wordpress.com/2014/04/20/credit-card-surcharge-mess-for-auctioneers/.
When auctioneers first started taking credit cards at auctions, merchants (auctioneers) were not permitted to upcharge (surcharge) for credit card purchases — and as such many auctioneers discounted purchases made with cash or check, indirectly surcharging nonetheless.
Now, and generally speaking, those limitations have been eliminated. Yet, there are specific rules about uniformity by card type, debit cards, gift cards, etc. However, there are also limitations per state law. Some states have enacted laws that prohibit surcharging for credit card use.
If you are an auctioneer accepting credit cards, debit cards, and/or gift cards for purchases, be sure to check two places to determine if you can surcharge for their use:
- Your merchant processor’s rules.
- Your state law.
Accepting credit, debit and other cards in addition to cash and other payment types is almost essential for any auctioneer. In 2021, over 80% of consumers preferred paying by card over cash or check. Especially for personal property auctioneers, credit/debit card acceptance is now essentially considered a required agency duty.
As we noted in our writing (link above) credit card surcharging (processing) rules are a mess — varying by card type, location, and a myriad of other merchant dictates. As an auctioneer, it pays to know all the rules which affect the acceptance of credit, debit, and gift cards, and with accompanying state laws.
Lastly, I hope it goes without saying to treat all your bidders to the same terms and conditions, set prior to the auction. We’ve attempted to note that acting arbitrary and/or capricious is clearly perilous: https://mikebrandlyauctioneer.wordpress.com/2022/02/09/setting-your-auction-bidder-criteria/.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
Mike Brandly, Auctioneer Blog 
If you are reading this in Texas here is an interesting note. Texas forbids the charging of a surcharge for the use of a Credit card, but the Statute creates no cause of action for doing so. Take a look:
§ 604A.0021. Imposition of Surcharge for Use of Credit Card
Currentness
(a) In a sale of goods or services, a seller may not impose a surcharge on a buyer who uses a credit card for an extension of credit instead of cash, a check, or a similar means of payment.
(b) This section does not apply to:
(1) a state agency, county, local governmental entity, or other governmental entity that accepts a credit card for the payment of fees, taxes, or other charges; or
(2) a private school that accepts a credit card for the payment of fees or other charges, as provided by Section 111.002.
(c) This section does not create a cause of action against an individual for violation of this section. Tex. Bus. & Com. Code Ann. § 604A.0021 (West)
This led to an interesting case in 2005 where patrons of a “Gentlemen’s Club” sued the establishment for charging them an extra $5 of they used a Credit Card to pay for shall we say “Services”.
Notwithstanding the guts it took for the plaintiff(s) to sue this establishment in open court and announce their names to the world, the district court dismissed for want of jurisdiction. They wanted no part of this. They held this was a matter for the Texas Finance Commission or the Consumer Credit Commissioner.
“Not so fast” said the Texas Court of Appeals:
“There is no evidence in the record that suggests (1) the Finance Commission is staffed with experts trained in handling surcharges on Credit Cards, and (2) any special expertise would be necessary to resolve appellants’ claims. Appellees’ primary defense is that they do not charge customers for dances, but the dancers, as independent contractors, charge the customers. Determining who is charging customers does not require the Finance Commission’s special knowledge, experience, or services, nor does it require resolving technical matters. The Consumer Credit Commissioner is no more qualified to make that determination than a trial court or jury. Moreover, because the Finance Commission has promulgated no rules concerning section 339.001, a trial court’s disposition would not lead to an inconsistent interpretation of the law. Consequently, the primary jurisdiction doctrine does not require trial courts to defer to the Finance Commission for resolution of this issue.”
Meekey v. Rick’s Cabaret Int’l, Inc., 171 S.W.3d 394, 399 (Tex. App. 2005)
This rather amusing argument aside, it seems that in Texas, the Law says you cannot charge a surcharge for using a Credit Card, but with no cause of action created by the Statute a consumer could only sue in district court for actual damages which would be negligible. Of course, you must bear in mind that the moment you have hire a Lawyer and to go to Court you have already lost. Maybe just pay the 3%.
Of course, you must bear in mind that the moment you have to hire a lawyer and go to Court you have already lost. Maybe just pay the 3%. Yes, suing on principle rather than to net a profit can have substantial hard costs.