TRADERS TO REJECT MOST CREDIT CARDS
MANILA, FEBRUARY 26, 2007 (STAR) By Ma. Elisa P. Osorio - Stores will no longer honor most credit cards as businessmen are considering banding together in order to fight the high surcharges imposed by credit card companies, Philippine Chamber of Commerce and Industry (PCCI) president Samie Lim said over the weekend.
In an interview with reporters, Lim said businesses are hurting because retailers are expected to absorb the costs charged by credit card companies.
The Department of Trade and Industry (DTI) has issued Administrative Order (AO) 10 Series of 2006 which said it is illegal for retailers to impose surcharges on credit card purchases.
The Philippine Retailers Association has earlier asked the DTI to reconsider the implementation of the said order.
"They are telling us we cannot pass the cost," Lim said. "There is no logic to that."
As a result, Lim said businesses will join forces and boycott credit card companies that have high surcharges. "We will band together and do business with one or two credit card companies only."
When asked which one, Lim identified the Bank of the Philippine Islands (BPI) because it is "the most sensitive and most fair to businesses." "They are the most efficient card company," he said.
Lim explained that this is probably because BPI has its own system and uses in house technology therefore the credit cardís operating costs is not as high as the other banks.
Late last year, DTI said retailers cannot use artificial promotional discounts to circumvent the directive banning extra charges on goods and services paid through credit card.
Director Victorio Mario Dimagiba, chief of the Bureau of Trade Regulation and Consumer Protection (BTRCP) earlier explained that adopting the card surcharge-inclusive price as regular tag, and then selling the same product to cash buyers at a lower price in the guise of a promotional discount is a violation of the DTIís AO 10.
In addition to this, Dimagiba said imposing surcharges violates safeguards against deceptive promotions. As per DTI definition, a practice is deceptive when it claims that a specific advantage of a consumer product exists when in fact it does not.
AO 10, which took effect November 5, metes out prison time and fines against violators. It requires every retailer to display only one tag to indicate the price of each product or service. The order bans the use of two price tags ó one indicating a "cash price" and another designating a "card price" ó for the same product or service.
Chief News Editor: Sol Jose Vanzi
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