Merchants charging extra for credit card usage
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  1. #1
    BamaNation All-American AlistarWills's Avatar
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    Merchants charging extra for credit card usage

    Had a Facebook friend fussing about going to an eatery chain and seeing a sign stating that they were going to charge an extra 3.5% if you use a card.

    Itís my understanding that this is a growing trend as the merchant is paying so much in fees for this customer convinence. These fees that the merchants are getting hammered with from the CC companies are funding the rewards programs(cash back/airline miles/gifts/etc).

    Frankly the CC company has folks over a barrel. Customer likes the convenience and the merchant must provide it if they want the customer to buy. The CC folks are getting paid twice, charging the merchants for using their service and charging interest to the consumer for not paying off their bill monthly.

    I saw a couple months ago that a local merchant (beauty shop/clothing store) was paying in the hundreds of $ every month in fees and they were considering charging more for running cards. I know gas stations often advertise a cheaper price for cash. I know of a furniture store locally that was doing this 15 years ago because in the owners words ďIím not paying for your rewards.Ē

    Have you all seen a growing trend in merchants charging more for card usage and what is your take on it?

    The Facebook friend is basically saying that if the merchant doesnít eat it as operational costs then they wonít shop there. Others commented that the merchant should just go up on their prices but to me that has the potential to hurt them with competitive pricing.
    I've read the end of The Book and I know who wins!

  2. #2

    Re: Merchants charging extra for credit usage

    All CC companies I'm aware of (the major cards) actually dictate that a merchant cannot charge more for the use of the card, though they never know unless someone turns them in.

    I lookout card fees as the cost of doing business - I can wait to see if a check clears or I can have the guaranteed cash right now. I'll take the guaranteed cash and pay a small percentage for that every time.

    The only time the inclusion of a fee would affect my purchasing of something would be when purchasing something expensive where I might be able to pay a slightly higher per item price and still save a lot of money by not paying the merchant fee.
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  3. #3
    BamaNation Hall of Fame Bamaro's Avatar
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    Re: Merchants charging extra for credit usage

    It used to be against the law in Md (not sure if it still is) to charge extra to use a CC but merchants could give a discount to customers paying with cash.

  4. #4
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    Re: Merchants charging extra for credit usage

    Quote Originally Posted by Bamaro View Post
    It used to be against the law in Md (not sure if it still is) to charge extra to use a CC but merchants could give a discount to customers paying with cash.
    They do that here at some gas stations, cash price is lower than cc price.
    Iím almost done with credit cards - have to have one for travel, but thatís it. Now some stores are charging $1-$2 to get cash on your debit card with your purchase. They donít pay swipe fees on debit cards, and most convenience stores have minimum purchase amounts for any card purchase.
    In the stores defense - Iíd never go in and brag about all the airline miles Iím getting for my purchase; the store is the one paying for your miles.
    Weíre moving towards all cash purchases ( except gas). Card companies screw business owner and customer alike.


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  5. #5
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    Re: Merchants charging extra for credit usage

    You pay for your conveniences.

    If you don't like the card companies' fees, you can pay with cash or check. If the merchant won't accept your method of payment, and you don't want to use a card, take your business elsewhere.

    Free market at work.
    You can't reason a man out of a position he didn't reason himself into.

  6. #6
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    Re: Merchants charging extra for credit usage

    Quote Originally Posted by 4Q Basket Case View Post
    You pay for your conveniences.

    If you don't like the card companies' fees, you can pay with cash or check. If the merchant won't accept your method of payment, and you don't want to use a card, take your business elsewhere.

    Free market at work.
    Yep - itís still a ďrelativelyĒ free country.
    Does anyone still write checks?
    I like the freedom to call out price gouging and egregious behavior that makes life tougher on consumers.



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  7. #7
    BamaNation All-American AlistarWills's Avatar
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    Re: Merchants charging extra for credit usage

    We still write checks. I refuse to do the debit card. Only use the CC for gas and when we just have to. The more that plastic swipes the more you open yourself up to identity theft. I donít need an HVAC mechanic with a weak password causing my CC to get stolen ( see Target intrusion as example)
    Quote Originally Posted by twofbyc View Post
    Yep - itís still a ďrelativelyĒ free country.
    Does anyone still write checks?
    I like the freedom to call out price gouging and egregious behavior that makes life tougher on consumers.



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  8. #8
    BamaNation Hall of Fame Crimson1967's Avatar
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    Re: Merchants charging extra for credit usage

    If you pay cash, you are still paying the fees because that is part of the businessí expenses that they use to determine how much they charge.

    Places that charge extra for credit cards arenít forcing cash people to subsidize your airline miles.


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  9. #9
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    Re: Merchants charging extra for credit usage

    Quote Originally Posted by AlistarWills View Post
    We still write checks. I refuse to do the debit card. Only use the CC for gas and when we just have to. The more that plastic swipes the more you open yourself up to identity theft. I donít need an HVAC mechanic with a weak password causing my CC to get stolen ( see Target intrusion as example)
    I donít write five checks a year; online banking works for me.
    Not worried about cc getting stolen so much; most cc companies will only hold you liable for a maximum of $50 in fraudulent charges, if anything at all. Debit cards are different; had my debit info stolen ( scanner) but credit union caught it early; someone charged $90 worth of gas in High Point, NC. They are not liable to cover any losses, though; my credit union did reimburse the $90.


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    Re: Merchants charging extra for credit usage

    Quote Originally Posted by Crimson1967 View Post
    If you pay cash, you are still paying the fees because that is part of the businessí expenses that they use to determine how much they charge.

    Places that charge extra for credit cards arenít forcing cash people to subsidize your airline miles.


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    Many businesses wonít accept cards that give airline miles because their fees are higher(specifically, AMEX but I went in one place that wouldnít accept a Venture card). Maybe the ones charging extra for cc usage do accept those cards and are simply making those folks pay for it.


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  11. #11
    BamaNation Hall of Fame Bamaro's Avatar
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    Re: Merchants charging extra for credit usage

    Quote Originally Posted by twofbyc View Post
    Many businesses won’t accept cards that give airline miles because their fees are higher(specifically, AMEX but I went in one place that wouldn’t accept a Venture card). Maybe the ones charging extra for cc usage do accept those cards and are simply making those folks pay for it.


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    I thought fees were uniform within the issuing company (Visa, Master Card etc) and not determined by issuing bank (Citi, Chase etc) or the banks 'rewards' plans.

  12. #12
    BamaNation Hall of Fame Crimson1967's Avatar
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    Re: Merchants charging extra for credit usage

    My credit card gives me hotel points and the name of the chain is on the card. Never had it refused.


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  13. #13
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    Re: Merchants charging extra for credit usage

    Quote Originally Posted by Bamaro View Post
    I thought fees were uniform within the issuing company (Visa, Master Card etc) and not determined by issuing bank (Citi, Chase etc) or the banks 'rewards' plans.
    It wasnít that way 9 years ago - transaction fees were set by the merchant service ( people who handle your cc transactions, not visa/mc). They are most definitely NOT all the same - ď merchant serviceĒ can be a bank (really high fees) or third party businesses. We never accepted Amex because their fees were so high; when you operate in a market where profit margins are tight, you save money where you can.
    The credit card companies themselves do not process your transactions. Swipe fees are charged by the company selling you the equipment and processing your transactions ( although you could by cc machine from third party but you had to find a compatible merchant service).


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