(11.20.08/B'Mirror)
HE raging preholiday shopping frenzy brings to the fore a perennial sales transgression of business establishments victimizing credit-card holders. When a customer pays with a credit card, some stores tack a surcharge on the tag price of the item, thus, credit-card users pay more than those who do in cash.
Picture this: You wanted to reward yourself this Christmas by buying a flashy new mobile phone, but the trouble is you do not have enough cash yet. Fortunately, the store is accepting credit cards. But the lucky feeling starts to fade when the store gives you the terms for credit-card transactions.
According to the sales representative, the price tag did not indicate an additional 10 percent charge for credit payment plus value-added tax or VAT.
In situations like this, the customer is at a disadvantage because the bank already charges the customer a credit service fee.
Thus, the Department of Trade and Industry (DTI) reminds establishments of the strict enforcement of Department Administrative Order 10, Series of 2006, or DAO 10.
DAO 10 reiterates the “Rules on Price Tags/Labels and Providing Prohibition against the Imposition of a Surcharge, Extra Charge or Additional Charge in the Use of Credit/Automated Teller Machine (ATM)/Debit Cards for Payment of Purchases of Consumer Products or Services.”
Simply put, all establishments must have tags written clearly, indicating the price of the product, including value-added tax (whenever the item is vat-able) and other types of charges per unit in pesos and centavos.
It, likewise, emphasizes the One Price Tag policy, which says that whether the client pays in cash or through card, the same price indicated in the tag of the goods or services will be paid. No extra charge shall be added to the price indicated in the tag regardless of the mode of payment.
However, some retailers try to circumvent the law. For example, according to the price tag a product costs P350, but your official receipt indicates that instead of paying this P350, you have to pay P380 because there is an additional charge for credit transactions, whereas as an incentive for paying in cash, you get to pay less.
Retailers argue that the price on the tag of the item is a discounted price whenever a client pays in cash, and the regular price is charged for credit-card transactions.
Under the Price Tag Law, as embodied in Article 81 of Republic Act 7394, otherwise known as the Consumer Act of the Philippines, consumers who pay in cash shall pay only the price indicated in the price tag, and those who pay through a credit/ATM/debit card shall pay only the price indicated in the price tag. When the retailer offers the consumer an option to pay in cash, card or on installment, the same is allowed provided the payment options shall be disclosed by way of separate information to the consumer, but not in the price tag. A price tag indicating a separate cash price tag and cash price tag on each product or service is not allowed.
Furthermore, Section 3 of DAO 10, or the “Modes of Payment and other Price Tag Practices,” states that: “It is necessary to consider business practices relative to the mode of payment to determine compliance with Price Tag Law. These practices include the following:
1. When the consumer pays in cash, he shall pay only the price indicated in the price tag.
2. When the consumer pays through a credit/ATM/debit card, he shall pay only the price indicated in the price tag.
3. When the retailer offers the consumer an option to pay in cash, card or on installment, the same is allowed provided the payment options shall be disclosed by way of separate information to the consumer, but not in the price tag.
4. Price tag indicating a separate “cash price tag” and “regular price tag” on each product or service is not allowed.
5. Price tag indicating a separate “cash price tag” and “card price tag” on each product or service is not allowed.
The DTI is strictly monitoring stores to see if they are observing the single-price-tag rule that serves as a guide to consumers on the exact amount they have to pay.
At the end of 2007, out of the 338 establishments monitored in the National Capital Region, 20 were found not complying with DAO 10, and most of the complaints are against restaurants padding up prices as against menu price cards and travel agencies charging an additional 5 percent on the amount of tickets on credit-card transactions.
From January to September of 2008, out of the 1,978 establishments monitored nationwide, a 1-percent rate of establishments was found not complying with DAO 10.
Thus, the DTI encourages the buying public to report violators immediately by calling DTI Direct 751-3330 so that other consumers will not be victimized by this unlawful practice.
Administrative fines in such amount as deemed reasonable by the secretary, which shall in no case be more than P300,000 depending on the gravity of the offense, and an additional fine of not more than P1,000 for each day of continuing violation, will be imposed to violators.
Send your feedback and queries to konsyumeratbp@gmail.com. For in-depth information on consumer issues, listen to Konsyumer Atbp. every Saturday, 10:00-11:30 a.m. over dzMM 630kHz. For consumer complaints, call the DTI Consumer Assistance Hotline 751-3330 or Text DTI
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