Eat Street drops card fee after Corsair investigation

A small purple sign next to the cash registers at the Santa Monica College cafeteria’s Eat Street restaurant notified patrons of the $0.20 surcharge added to credit card purchases under $3. The fee—raised earlier this semester from the $0.10 charge implemented earlier this year—was said to cover the processing fees imposed on the business for the card.

As of Friday morning, that sign has been removed and the fees are gone, after a Corsair investigation found that Eat Street was in violation of a California Civil Code and unlawfully collecting fees from customers.

California Civil Code 1748.1 states, “no retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means.”

Management at An Catering, the group that operates Eat Street, was notified of the violation and at first dismissed the accusation.

Management proceeded to phone legal council who confirmed that they were in violation of the civil code, according to Victor Cardet, Director of Operations for An Catering.

They then elected to remove the fee. The service charge, which applied to purchases made under $3, was meant to balance out the cost of processing credit card transactions, which is 16 cents through their processor First Data.

“I think it’s a mistake,” said Hannah An, owner of An Catering. “The goal of that is not to take advantage.” She says that Eat Street does not know as of yet what it will do to make up for costs.

According to Cardet, in lieu of the service charge, Eat Street could place a general price hike, or add an extra fee to all purchases, whether credit or cash. The fee could be anywhere from $.05 to $2, he said.

An Catering wouldn’t release how much money was made off of these unlawful sales.

But here’s the math: If a student purchased a drink at Eat Street once a day, four days a week, it would amount to $25 in fee surcharges per school year, per student.

“I’d be asking for my money back,” said Harto Hizkia, an SMC student.

According to the civil code, a retailer in violation is liable to refund any cardholder who makes a written request for the amount and “shall be liable to the cardholder for three times the amount at which actual damages are assessed. The cardholder shall also be entitled to recover reasonable attorney’s fees and costs incurred in the action.”

California is one of 10 states including Florida, New York, and Texas to adopt a policy prohibiting retailers from adding credit card surcharges.

“I don’t really mind,” said student Ryan Sassonnian, adding he would be willing to pay up to $2 extra for a meal.

“It’s not the end of the world,” he said.