can a merchant pass on credit card fees to the consumer?

vash · vash's Garage

i bought lunch today. in an effort to keep some walking around cash in my wallet, i opted to pay for my lunch with my VISA. the lady told me she would have to charge me some extra money for charges less than $20. is this even legit? i payed with cash, and ate my sandwich in a very annoyed mood.

Talewinds · Talewinds's Garage

Never heard that...
I suppose, having never been in the food industries, that for restaurants that don't serve booze the margins are so slim that the CC fees on a tab less than $20 could mean a loss for the restaurant???

Hugh R · 02-09-2010, 05:56 PM

Sure, see it all the time. I know a tire store that charges 3% more for cc over cash. Many gas stations as well.

ben parrish · 06:03 PM

Not "legal" to pass on a fee. The CC company agreement with the merchant prohibits this. The merchant also can't refuse to allow charges below a certain dollar amount. The merchant can, however, give a discount for paying with cash...say 3%.

No real law against it but the merchant can get in hot water with the CC company if someone reports them to the CC company.

Embraer · Embraer's Garage

A ton of guys do this on auction sites. Not only credit cards, but Paypal. Some people say "+3% for Paypal"

masraum · 02-09-2010, 06:01 PM

Yeah, I've heard and read several times that the credit card companies don't allow folks to charge extra for CC use.

The way some places get around it is by giving a "discount" for cash payment instead of a surcharge for cc.

gprsh924 · 02-09-2010, 06:04 PM

If it is a Visa, they can't surcharge you or have a minimum payment. However, at almost every bar I go to, they will have signs that say $10 minimum on cards. I think it is just there to attempt to scare people into spending more, as I have put many single $4-5 drink charges on my card in such establishments.

Visa USA

TechnoViking · TechnoViking's Garage

Quote:

Originally Posted by Hugh R

Sure, see it all the time. I know a tire store that charges 3% more for cc over cash. Many gas stations as well.

Yea, that's what my tire guy does. And a car dealer demanded a premium for a down payment when I tried to use a card once.

Hugh R · 02-09-2010, 07:04 PM

I should revise my statement and say, yeah, they give discounts for cash. But here in LA you often see cash and credit card prices for gasoline.

Looking_for_911 · 02-09-2010, 07:05 PM

I make it a practice to never re-enter an establishment that uses those tactics and always try to tell at least 3% of the general population I meet what SOB's I think the merchants are!

Shuie · 02-09-2010, 07:13 PM

Most merchants just build the 3% into their asking price. I guess it depends on the terms, but I don't think they can charge you an extra 3% to cover credit card fees. They can raise their sale price by 3% and then offer a 3% discount for cash, tho. It's pretty silly. I always ask if they take AmEx, or for a cash discount, just for giggles.

Apollo · 02-09-2010, 07:15 PM

This is permitted in Australia,though the merchant rarely imposes it as it reduces the chance of repatronage.

Don Plumley · Don Plumley's Garage

As said, the merchant services agreement states very clearly you are not allowed to tack on a surcharge. You are allowed to offer a cash discount however. Ebay/Paypal with individuals doesn't count.

Arizona_928 · 02-09-2010, 07:18 PM

Quote:

Originally Posted by gprsh924

However, at almost every bar I go to, they will have signs that say $10 minimum on cards.

Yeah, I've noticed that too. At my old job the owner would charge $.50 if customers used there CC on purchases under $10. And that was at a bakery!

BTW did you like those socks

stomachmonkey · 02-09-2010, 07:31 PM

When a merchant accepts a CC the average cost is 2-3% plus $.25 per transaction. Those are averages.

That's why the bar wants you to run a tab and not pay per drink.

If you order 5 drinks and pay by CC each time it cost them $1.25 in transaction fees alone.

mikester · 08:05 PM

It isn't 'against the law' for them to do this but it is against their merchant agreements with the CC companies.

They cannot charge more for CC purchase than cash and they cannot have a minimum price for credit card purchases. You can report them to the CC companies if they do it. It can impact their ability to accept credit cards which could in turn hurt their business. Still the CC fees that merchants are charged are not insignificant - you help them by paying cash. You help the credit companies by using your card EVEN IF YOU DON'T CARRY A BALANCE!

The merchant agreements also indicate that to accept a credit card the merchant CANNOT ASK FOR ID! They have to use the signature on the back for ID Verification purposes. If you write 'ask for ID' on the back of your card instead of signing it - technically that card you are using is not valid.

Also, if you use your card as a debit card (using your PIN instead of signing) the fees are different if not eliminated for the merchant. The problem with that is the risk is moved from the CC companies to your bank account. I never debit for a purchase - EVER. I try to pay cash, for larger purchases I will use the CC for some of the protections provided - especially for online transactions.

I never accept Paypal for payment but have used it to make payments. Check out www.paypalsucks.com...

Just some food for thought...

RWebb · RWebb's Garage

Quote:

Originally Posted by ben parrish

Not "legal" to pass on a fee. The CC company agreement with the merchant prohibits this. The merchant also can't refuse to allow charges below a certain dollar amount. The merchant can, however, give a discount for paying with cash...say 3%.

No real law against it but the merchant can get in hot water with the CC company if someone reports them to the CC company.

almost every place in town does it now - the credit card banks are sticking it to 'em on fees now that congress won't let them ream out the poor consumer any more...

- cut off is usually $5, sometimes $10

I would never report them - I care a lot more about my local merchants than the giant banks, rolling in the dough.

cstreit · cstreit's Garage

It should certainly be posted and it is against their agreement, but I can't say that I disagree with the practice.

When you use your special cash-back-airline-miles-personalized-insured-super-card the fees to the merchant can top 4+%. When someone is operating on thin margins (10% is not uncommon these days) taking 4% in fees away is taking away 40% of their thin profit.

it's robbery but imagine the loss of business if you DON'T take credit cards.

lm6y · 02-10-2010, 05:24 AM

Quote:

Looking_for_911 I make it a practice to never re-enter an establishment that uses those tactics and always try to tell at least 3% of the general population I meet what SOB's I think the merchants are!

And I bet you complain about high prices also.

In a small operation, a "Mom and Pop" store if you will, the fees for using a credit card machine sometimes removes all profit from a sale. These businesses are already operating on such a small margin to compete with the big boys that they barely keep their heads above the water from month to month. On labor, it's almost an unintentional slap in the face

I wonder how many people that hate "Big Business" also ***** about this 3%.

And yes, I am trying like hell to get a small business off the ground. 80 hour weeks with basicly no pay, in the hope that we can get this thing off the ground. We don't pass this fee on to the customer, it doesn't fit in with our clientelle. But I sure as hell won't criticise anyone who does.

Looking_for_911, you are the type of customer we don't want. We bust our ass for little pay to get you the best price possible to try to make you happy, and then you ***** about 3% and the tell everyone how you got "ripped off".

Would you replace a timing set, and camshaft position sensor on a 2001 Silverado V-6 for $425 AND supply all the parts? I'm on my way to do just this right now. Not making much on this job once you include the overhead, but I REALLY want the business, and return customer. If he wants to pay by credit card, I'll tell him how much it will cost me while I slide it through the machine. $12.75 isn't worth losing a customer over, but it also means I bought this guy a gasket or two, and some silicone.

At least try to understand why this "SOB" is doing what he does. If you have kids, in this economy, you need every penny. Fortunately, I don't have kids, and can let the fees slide.

onewhippedpuppy · 02-10-2010, 05:49 AM

The lumberyard that I used to manage in small-town central KS didn't take credit cards because they couldn't afford the hit to their bottom line. Instead most of their customers had charge accounts, which billed monthly. It was always amusing when someone from out of town came in and whipped out the plastic, the expression was always utter disbelief. But after explaining the why, they almost always pulled out cash or a checkbook.