A consumer financial advice website reports a large number of merchants in California and other states have begun surcharging and/or demanding minimum purchases amounts for debit card use.

GoBankingRates.com reported that large numbers of ARCO filling stations in California charge 35 cents for consumers to use a debit card and subsequent investigation revealed that the 35-cent charge is not a matter of individual ARCO stations charging the fee, but a matter of ARCO policy.

A frequently asked questions file on the gasoline vendor's website explains this way:

“In an effort to balance the customer's need for convenience and value, PayQuick terminals are available on our islands,” ARCO wrote. “PayQuick is an easy way for customers to pay for their gas using cash, debit cards, PumpPass or GasPRO Plus Cards. There is a 35-cent processing fee for debit cards only, in addition to any fees your bank may charge for this service. For all other transactions there are no additional fees. This allows our customers the flexibility of using a debit card.”

California law and rules from both Visa and MasterCard both forbid surcharging debit card usage but allow merchants to offer discounts for using cash instead of credit cards.  ARCO does not accept credit cards in its California stations, but said it has launched a pilot program with stations in the Seattle area that has select ARCO stations both removing the 35-cent fee and accepting credit cards.

GoBankingRates.com also documents similar surcharges at convenience stores and other retailers and attributes their proliferation to retailers taking advantage of consumer confusion over what cards they are using and how that use is regulated.

Neither BP, which owns ARCO, nor Visa have yet commented on the surcharging policy.