Credit card surcharges (i.e. "cash discounts") BS

[biosurfer1]

It seems like everything I buy these days has a credit card "surcharge" that is being masked as a "cash discount". It's annoying because I never carry a balance on my credit cards but it's nice getting points/miles for using them, but some of these charges are getting to be 8+% which is ridiculous.

Technically there is a difference between a cash discount and a surcharge, it all depends on what the posted price is. Visa says merchants have to post the credit card price and can choose to charge less for cash, but they should not post a price then charge the credit card user more. Semantics, I suppose, but I'm well on my way to not using cards if it's going to cost me that much more.

Most of this rant comes from a small vending machine purchase today that said $1.25 and when I swiped my card, I notice it says total charge was $1.35. I called the vending company to find out why and they said "Oh there is a $.10 discount for using cash, there should have been a sticker that says that" (there isn't) and my response is it says it's $1.25, so a $.10 discount would mean cash should pay $1.15, right? Of course, silence on the other end.

It's not just vending machines either, tons of places now do it including most gas stations around here.

[red-beard]

I get charged up to 3% of the transaction if you use a credit card. No BS!

[pwd72s]

It's a way for merchants to avoid being charged by the card companies.

[red-beard]

Let me put it this way, on a $45,000 install, if you want to use a credit card, we add in 3% or $1,350. It generally pushes people to use a check, which is perfectly fine. We do not make money on upcharging a credit card.

[pwd72s]

Originally Posted by red-beard

Let me put it this way, on a $45,000 install, if you want to use a credit card, we add in 3% or $1,350. It generally pushes people to use a check, which is perfectly fine. We do not make money on upcharging a credit card.

Don't blame you one bit. Personally, I've started carrying more cash for small purchases, dinners out, etc. Write checks for larger amounts. Makes things more difficult for identity and credit card number thieves.

Hackers may get into Target stores card info...but they can't hack cash.

[GH85Carrera]

Originally Posted by red-beard

Let me put it this way, on a $45,000 install, if you want to use a credit card, we add in 3% or $1,350. It generally pushes people to use a check, which is perfectly fine. We do not make money on upcharging a credit card.

We only take credit cards because of government contracts all seem to want to pay us with a credit card. The Feds and state level departments all do it. We have called companies and told them we would rather wait two weeks for a check than run their credit card.

[biosurfer1]

The way credit cards always justified the processing charges is it allowed merchants access to a larger pool of customers who used them, and the fee was the cost of that.

FYI, it is against every credit card company rules to add anything to a customer's bill to use a credit card, which is exactly what red-beard is doing. In that case, the price should be $46,350, and if you use cash, it's $45,000.

I don't care about charging less to use cash, the problem when I have is when they post a price, I go to pay and am charged a higher amount because I used a credit card because the price stated included a hidden cash discount.

It's no different than if you go to buy a car that is advertised at $15,000 and you get there to buy and they charge $17,000 and get the "Oh sorry, that prices reflects a "buying on Tuesday" discount and today is Wednesday" It's false advertising.

[pwd72s]

Bio, I agree with you. In the case you stated, they knew you wouldn't fight much over 15 cents...but 15 cents times 1,000 is...

[biosurfer1]

My guess is that is their hope for everyone.

[masraum]

The only place around here that I'm aware of is a big chain of liquor stores. Is the only place that I use my debit card.

[KFC911]

I've ranted about CCs enough here over the years

Used to be around 4% overhead on CC purchases...so it's a bargain now .

[Por_sha911]

Originally Posted by biosurfer1

It's no different than if you go to buy a car that is advertised at $15,000 and you get there to buy and they charge $17,000 and get the "Oh sorry, that prices reflects a "buying on Tuesday" discount and today is Wednesday" It's false advertising.

But they all charge a "documentary fee" for doing the paperwork and in some cases they try to charge $999.00 I even had a dealer charge a local tax that didn't exist. I took home the paperwork and was going to pick up the car the following day. When I spotted the "tax" I called the courthouse to verify if there was such a tax and they said no. When I went back to pick up the car I requested to remove the charge and lower the price because the courthouse said there is no such "tax". I said I was sure the person on the phone was in error and was going to take the paperwork down to the courthouse to prove it exist. The dealer quickly reduced the price as requested. This is why I always ask for the bottom line including tax tag prep doc... and then negotiate from there.

[cstreit]

Here’s the issue.

As a retailer or business the “Amazon Effect” means 80% of what consumers care about is finding the cheapest price. (I’ll save my thoughts about the being asked to support a cheaper sellers customer because they only care about the sale, not after sales service). This has pushed margins down to the bare minimum and in some cases certain retail items have margins as low as 2-5%. So the 3% surcharge you force the retailer to pay the credit card company to pay can make a huge difference.

[gtc]

Originally Posted by pwd72s

Hackers may get into Target stores card info...but they can't hack cash.

Tell that to the guy that had an envelope full of cash stolen at the Lit Show. Losing a credit card? No problem.

How nice would it be if everyone at a swap meet just used Square or Paypal or whatever, rather than carrying around wads of cash?

[Zeke]

Gas is a dime more a gallon unless it's cash. I don't understand why debit cards don't get a bye. or get this: local grocery store offers points, or a 10 cent/gallon discount at certain Shell stations. So you have to use a card triggering the higher price. A least that seems how it works.

[biosurfer1]

Originally Posted by cstreit

Here’s the issue.
So the 3% surcharge you force the retailer to pay the credit card company to pay can make a huge difference.

Force? It's an easy solution. Don't accept credit cards if the retailer doesn't want to pay for the service. It's right there in the terms and services when they sign up, they cannot charge a customer the fee for being able to use the credit card. Don't want to abide by the rules, don't sign up for it, simple.

Retailers want to have the convenience and larger customer pool by accepting credit cards, they just don't want to pay for it. I guarantee practically no one would sign up for credit cards if the terms said "Also, you agree to pay 8-10% more for every item you purchase with this card to pay for the processing fee"

This "cash discount" is just a BS way around that, which I hope the credit card companies do something about soon...but i'm not holding my breath.

[GH85Carrera]

Two of the restaurants I like do not accept any credit or debit cards. Cash or check, and checks are rare.

Both places have lines out the door at peak times.

I am surprised any gas station would charge more for credit cards. None do that around here. To deal with the price of a full tanks of gas is a lot of cash times a 1000, big attraction to robbers.

[fastfredracing]

When I add up what I pay in credit card processing fees at the end of the year, it is pretty shocking .

[Venetian]

Does it say on receipt that there is a credit card use charge? I always thought it was the retailer who paid. We use a credit card a lot and I have never noticed. Maybe because I am not paying attention?? I am in Canada so maybe its different here??

[red-beard]

Originally Posted by Venetian

Does it say on receipt that there is a credit card use charge? I always thought it was the retailer who paid. We use a credit card a lot and I have never noticed. Maybe because I am not paying attention?? I am in Canada so maybe its different here??

The reality is that our prices are the "cash price", which reflect a 3% discount. If you wish to pay by credit card, the price is higher.