On January 27, 2013, a settlement between retail merchants and credit card networks took effect. This settlement allows retailers to charge customers a “checkout fee” when they use a credit card at the register.

Ten states, however, objecting to the fees, have already passed laws making them illegal.

An additional 13 states have similar bills up for consideration, and more states are expected to follow.

The settlement is the result of a 2005 suit filed by retailers against credit card companies.

Credit card companies charge retailers an “interchange” or “swipe fee” for the privilege of accepting cards in stores.

This swipe fee usually amounts to 1 to 4 percent of the cost of the item being purchased. Previous contracts between credit card networks and retailers forbid retailers from passing this cost on to the consumer in the form of a fee. As a result of the lawsuit, however, retailers are now permitted to vary items’ prices based on payment method, so long as they disclose any fees to shoppers.

California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, however, have already approved legislation banning checkout fees. In addition, Hawaii, Illinois, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Washington and Tennessee have similar legislation under consideration. If these bills pass, almost half of all states in the country will have made checkout fees illegal.

New Jersey Assemblyman Vincent Prieto (D-Secaucus), who introduced a bill banning checkout fees in his home state, said,

“The amount of the surcharge may seem minuscule on paper, but in the family budget 1.5 to 3 percent could add up to a shorter grocery list or less to spend on gas.”

Opponents of checkout fee bans, however, believe that time and effort is being squandered on these bills. “It’s a waste of the legislative process,” said Mallory Duncan, senior vice president of the National Retail Federation. Instead, she argues, state legislatures should introduce higher levels of competition into the marketplace by prohibiting price fixing of swipe fees.

Many large retailers, such as Target, Wal-Mart, Sears and Home Depot have already announced that they have no intention of charging checkout fees. Duncan argues that most other retailers will also decline to charge these fees.

“Merchants in general have no intention of surcharging,” Duncan said. “We have discussed the settlement with many of our members and other merchants,” she said, “and not a single one has said they will surcharge.”

Furthermore, national chains simply will be unable to charge checkout fees in any state. According to the terms of the settlement, checkout fees must be applied uniformly across all states. Since many states have already banned checkout fees, this would be impossible for national retailers. Individuals using American Express cards will also be exempt from any checkout fee as American Express was not party to the lawsuit.

Despite these facts, however, the settlement on checkout fees continues to be unpopular in state legislatures. With laws banning fees already in place in 10 states and similar laws expected to follow in another 13 states, it appears as if the checkout fee is dead before it even had a chance to take effect.