Maybe my memory is faulty, but I never remembered having to pay a surcharge to use a credit card. Now everywhere I go there are signs saying that there is a 2.5-3.5% surcharge to use a car (and others that say that there’s a 2.5-3.5% discount for using cash, I assume to get around wording)
Are you new to capitalism? These fees have been passed down since forever, they were just not disclosed. Do you think retailers swallow the cost of the surcharge?
Buisness I work for will never take credit. The cheapest processing fees we’ve found are severeal percentage points more than our profit margin.
I work in fintech, serving the US market. Fees are varying but not specific to AMEX/Discover/MC/Visa. There’s card fees and then there’s gateway and payments processor fees. Often this is cumulatively just a flat fee, like $3-4, which is why some places will have signs saying “$3 extra charge for CC purchases below $20”.
We should have a standardized government approved and facilitated electronic banking system for all payments in the US.
There should be no private company gaining access to payment information or taking their cut for the majority of transactions.
The fact that there is in my opinion is predatory. These are the worst kind of companies, milking old technology without innovating or adding any real value.
The credit card companies have always tried to prevent merchants from doing this by inserting language prohibiting either credit card surcharges or cash discounts into the contract agreements with the merchants. Obviously, credit card companies want to make it easy and convenient for consumers to use their credit cards.
I can’t immediately find it, but at some point I think 10-15 years ago, some merchants sued the credit card companies over this, and they won a court ruling that said that the clauses forbidding cash discounts and surcharging are unenforceable. As a result, merchants are now free to do it, but there are various rules. And some state legislatures have started to get involved with regulating things.
A big part of it was the rise of credit card perks like cash back, supported by higher credit card fees. I gotta admit, why should the vendor be paying for our cash back?
Almost as if the cash back scheme is just that, a scam.
But you can’t opt out. It scams the vendors but also the people who don’t take part.
Opt out by not using that credit card. I refuse to have a CC with points or cash back.
thank conservatives for pushing the cost of raw goods up, lowering margins.
if your margin is 5% you sure as fuck dont want to be pushin 3% to visa
They always have.
In the past it was just by increasing the prices of things to cover it.
Now they’re talking about why they’re doing it in the hopes we won’t be pissed at them and pissed at the credit card people.
Good question. I believe the card companies used to have language in their agreements stating that vendors were not allowed to specifically charge fees for card usage. So you used to occasionally see places offering a discount for cash like you said.
But I have been seeing more and more places outright stating a card fee, so I wonder if those agreements have changed in the last several years.
Not sure where you are located, but A quick search says that there are some US states with laws banning card surcharges, but most allow them.
Unfortunately, you know those fees were baked into pricing structures long ago, so any place charging an extra fee for card usage is definitely double-dipping.
This is really the best answer, I think. Except the agreement you have to sign to take Visa cards used to stipulate that you could not offer a discount for cash.
Visa’s rules have changed in favor of the merchants at last…… Visa has updated their Visa Core Rules and Visa Product and Service Rules, and the rules changed benefit all business owners in all 50 states ! …Now, you can offer a discount when your customer pays with cash in efforts to incentivize your customers and avoid having to pay credit card processing fees. (Therefore if you sell a product or service for $100, you get to finally keep all $100 of the sale….Not $96.00 )
I have not yet seen it normalized but I have seen the opposite. 5% discount for cash. I mean effectively its the same thing. EDITED - thought I would mention there was a well known burger place in my area run by some brothers who would only take cash. They had a sign with the location of the nearest cash machine. I think they decided the credit card machines were not worth the hassel and its the kind of place that had a line out the door the whole time they are open.
I’ve seen shops that only take cash, with an ATM in the store.
I kind of get it for small shops. Even just reconciling the register every day is way easier with just cash.
Plus, no chargebacks.
If a customer gets cash from the ATM and then gives you the cash, they can’t later try to claw that cash back by denying the charge.
I’m my experience, most places like that set up their own ATM with absolutely extortionate fees as a way to get extra money.
im pretty sure the brothers did not want to deal with whatever you have to do to get an atm. it was a pretty lean operation with really just enough room for the grill, fryers, blender, prep area and register. Very limited counter seating in side and a few tables outside. still in winter big lines. people just take it to go.
More likely, it’s to fudge the numbers and pay less tax. Credit cards leave a record of income. Cash doesn’t.
That’s been a thing since the beginning of the cards being implemented. In the US they’ve tried to make it illegal, but like, economics doesn’t work that way. The store owner needs to make a profit, so the fee is going to the customer.
It’s always been the case. Now it’s just transparent, vs. being baked into the price of the goods. When the economy sucks, vendors do stuff like this to try and soften the blow (for themselves).
Was it really baked into the price of the goods when the price of the goods hasn’t changed?
It sounds like a way of raising the price while incentivizing cash payment (because maybe just maybe they aren’t claiming all their cash sales)
If their costs went up by 3%, they could hold prices level by taking the credit card fee out and making it an explicit surcharge.
Just posted the same thing. Its always been passed to the customer, just now it’s blatant and they’re adding more “fees”.
Shareholders gotta eat too! /s
Smaller local convenience stores in Canada, often had a CC charge added probably 20 or more years ago.
Its been baked into the item price for a long time, they’re just being blatant and adding fees.
It used to be against the terms that the businesses signed with the credit card companies. This allowed CC companies to build up their market share while offloading the blame. Then in 2013 a lawsuit ended with them not being able to enforce that.
When everybody started using the “easy” POS systems like Stripe, Square, Clover etc which typically charge 1-2% more for credit card fees rather than the more competitive but poorly integrated processors like authorize.net or the random guy coming into your business.
There are some decent laws here to stop this getting out of hand and make sure it’s reasonable.
