In the U.S., airlines don’t typically charge a fee for using a credit or debit card to purchase a ticket. (Allegiant is an exception, by charging a $14.99 “convenience fee” for online bookings with credit card payment. Other U.S. airlines have tried, but failed thusfar.)
In Europe, a credit card fee is more of a norm. But Ryanair, which has been charging a fee for years, was just slapped down by the German courts for charging the fee:
Germany’s federal court of justice found yesterday that Ryanair placed consumers at a “disproportionate disadvantage” by offering no way to pay for flights without incurring a fee.
“By charging the fee is shifting in a one-sided manner on to customers the costs of fulfilling its own legal obligations … without bringing any service in return,” said the court, a practice at odds with German law.
The case against Ryanair was brought by Germany’s leading consumer organisation. It complained about the fee, which ranges from €1.50 to €4 per flight and passenger.
By not accepting cash payments, it argued, Ryanair offered customers no opportunity to pay for flights without paying extra.
I can understand the motivation behind this fee: Merchants accepting credit cards give up a piece of each transaction to the credit card processing bank. (The percentage varies according to card brand and total transaction size.) But there are rules to which merchants are required to adhere. I couldn’t find a European merchant agreement. But in the US, for example: “Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge a surcharge fee when you use your Visa card.”
It will be interesting to see if other European countries see similar cases. Credit card fees aren’t limited to Germany, after all.