The Investigation and Information Gathering Office of the Municipal Guard warned traders against charging extra for purchases made using debit cards.
In its statement yesterday, the Municipal Guard said, this warning comes in response to complaints regarding the imposition of a surcharge—reaching up to 20% in some clinics and medical centers—on card payments versus cash payments (a practice that directly violates the law):
Acting on instructions from the Central Bank of Libya and in cooperation with the Ministry of Economy and Trade, the Municipal Guard inform the public that it is strictly prohibited to impose any surcharge on the price of goods or services when paying via bank cards.
It stressed that the displayed price is the final price, regardless of whether payment is made by cash or card.
Any commercial establishment—including clinics, medical centres, pharmacies, grocery stores, and others—that violates this rule is committing an offense punishable by law, it reminded.
The Municipal Guard urged the public to report such violations immediately, providing the name of the establishment and its exact location.
Why dual pricing?
It must be pointed out, however, that the higher price charged by traders on card payments reflects the continuing cash crisis in Libya.
At the time of writing, despite all the efforts of the Central Bank of Libya in importing newly printed denominations, there is still a cash shortage at Libyan banks. Citizens or traders cannot at this moment withdraw large amounts from their bank accounts.
This is a problem born with the collapse of the state following the February 2011 revolution that ended the 44-year Qaddafi regime. Confidence was lost, and has not fully returned, in the current regime. Hence, people prefer to hoard their savings at home rather than deposit them in their bank accounts.
From traders’ point of view, some of their suppliers also charge less for cash payments, whilst in-demand goods or services have the ability to sell in cash only.
e-payments
It will also be recalled that there has been a drive by the Central Bank of Libya, in conjunction with the Ministry of Economy and Trade and the Municipal Guards, to enforce the need for traders to receive payment from customers (using Point of Sale-POS-cards) using debit cards.
This was part of the effort to alleviate Libya's cash crisis. However, cash is still preferred and opens the opportunity to haggle for better discounts.
Libya's Municipal Guard and Central Bank Coordinate to Modernize Financial Oversight
Libya Mandates E-Payments: Businesses Face Shutdowns for Non-Compliance