<p>Just read with some sadness that merchants may start charging extra for using a credit card. Perhaps 2% or so. </p>
<p>I think this is an unfortunate turn of events. So many people use plastic to pay, companies don’t want to take checks anymore. I don’t carry hundreds of dollars in my wallet. Just credit cards.</p>
<p>Not looking forward to paying surcharges every time I make purchases.</p>
<p>As the owner of a retail store, I can only welcome this development. I think it’s only fair that the consumer, who is benefiting from the use of the card as much as the business, share some of the processing costs. I do agree that the better approach from a marketing point of view would be to offer a discount for cash.</p>
<p>They would be better off building the surcharge into the price and offering a discount for cash. That is what I would do as a retailer. Then people using plastic don’t feel they are being gouged and the ones that decide to pay cash feel they are getting a deal.</p>
<p>Offhand a couple of businesses I can think of already do this. My dentist offers a 5% discount for cash or check if the bill is over $500. Some gas stations offer discounts for cash.</p>
<p>Somebody should start a credit card company that charge a lot less in fees. I can’t believe that someone could not undercut the 3-5% they charge for every transaction. What a racket and easy money for the banks and credit card companies. And then provides less fees and charges on the consumer side.</p>
<p>As an owner of a retail store, would you incur any additional costs if your customers started paying by cash or check in lieu of credit card? Fees such as additional store clerk to handle cash, armored security to take deposits to the bank, insurance costs to cover larger amount of cash on premises, non sufficient fund check fees, etc?</p>
<p>And would you lose any business from people that don’t carry cash (like me)?</p>
<p>There are some restaurants that only take cash, (The Red mill & Dick’s hamburger chain for instance- Dicks also uses the old style cash registers that don’t tell you how much change to give) they don’t seem to be hurting for business.
Some of them (not all) also have a cash machine nearby ( although generally the cash machine charge $3 for the service)</p>
<p>My credit union uses a cash machine that scans checks for deposit, my D uses an app that does the same thing with her phone, I’m waiting for retailers to get something similar that transfers money just by scanning your check.</p>
<p>I agree that discount for cash sounds like a plan.</p>
<p>I like using my credit card though, because the bank categorizes all my purchases at the end of the year which makes it easier to do taxes.</p>
<p>Absolutely. When a business gives me the option of cash (check) or plastic at the same price, I’m going to take the plastic because I get reward points. If they offer me a cash discount, I’ll write a check (large things) or pay cash (e.g. filling stations). Then there are companies that give benefits for using their house brand plastic, like Target offering a discount, or Amazon giving extra reward points, or LL Bean that offering benefits like free return shipping and monogramming.</p>
<p>This is a case of killing the golden goose. Merchants constantly complain about credit card swipe fees, but let’s not forget some facts:</p>
<p>1) Credit cards ensure you are paid. For big ticket items this is a huge deal because checks can bounce.
2) Credit cards allow lines to move much faster (fewer cashiers needed), reduce less cash handling (fewer bank runs required, no need for armored car pick-ups for higher priced stores, less losing of random dollars).
3) Credit cards, quite simply, induce people to spend more in their store than they otherwise would.
4) People are more likely to shop in your store if you don’t penalize them for using a credit card.</p>
<p>I realize that credit card fees on low balance transactions are rough, but that’s easily resolved by a minimum credit card charge. Anything above that is pure, unadulterated whining.</p>
<p>The only business category I’ve seen that widely offers a cash discount are gas stations, and not all of them do it. It’s incredibly annoying though to see a good price and pull in to fill up, only to then see in teeny tiny letters “cash price”.</p>
<p>There are stores I’ve run across that will give you a small cash discount if you are making a large purchase and you ask for it, typically non-chains like local furniture stores or jewelry stores.</p>
<p>I get 1.5% back from my credit card though, so a 2% discount for cash doesn’t have that much appeal.</p>
<p>What people may not realize is that that when you pay with a credit card, the merchant pays a percentage (often 2-3% ) to the credit card company. That $100 charge nets the merchant $98. and $2 for the credit card company. Add that to the high percentages they charge people who don’t pay their bills in full every month and they make out pretty well. The reason many merchants don’t take American express is that you have to pay that in full every month so AE doesn’t make money on the finance charges so they often take a higher percentage from the merchants or hold the money for up to 10 days before depositing in the merchant’s account.</p>
<p>I always wonder when I pay cash if the merchant will claim the revenue as income. I may be a skeptic, but I like to think that taxes are being paid appropriately. </p>
<p>I feel that the merchant has the option to accept credit cards for payment and the purchaser has the option not to pay the upcharge.</p>
<p>I do enjoy the perks of my Discover card Rewards and I pay the balance every month so it’s like a free monthly line of credit with some perks. I know the merchant pays for it, but assume it is a cost of goods sold type of expense.</p>
<p>The costs of credit card processing are built right into my pricing structure. I don’t take checks at all – the risk is too high at the moment and the little unit that lets me process the check when it’s tendered ends up being more expensive than taking credit cards.</p>
<p>A little secret – there’s not a flat rate for credit cards. There are about 20 different rates from my processor depending on the type of card, ranging from 1-4%. Those rewards cards are really expensive for us as retailers – and the check cards or debit cards are relatively inexpensive. There’s a swipe fee for every transaction, and they better swipe because it costs too much and it’s too risky to take a card that must be manually keyed.</p>
<p>Regarding cash discounts – a lot of times the customer will not only want the 2% for cash, but the 6% for sales tax too. I am just not playing. All my transactions go through the cash register and I collect and pay sales tax on all of it. Just an FYI – we don’t get any sort of compensation for collecting and remitting the sales taxes, aside from having the float for 30 days. And even small business must do it online.</p>
<p>The Dodd-Frank Bill reduced the fees related to debit cards, because there isn’t a material loan factor or risk of loss factor when you the consumer are paying out of your account through a 3rd party. </p>
<p>I know some people who don’t take credit cards at all but the state - MA, same as another poster above - recently allowed credit card minimums, so more merchants are going to those. The old law that prevented any minimum was widely disregarded but I’ve heard from some merchants that they’ve seen some sales increases as people buy to get over the minimum.</p>
<p>In NJ, it’s the norm to have different prices for cash & credit at the gas pump. (of course we don’t pump our own gas :), so the attendent has to deal with you anyways). Right now, the differential is typically $0.10, so it’s about a wash if you have a credit card that gives 3% back on gas purchases.</p>
<p>When our business signed merchant agreement with the credit card company, we had to agree not to put surcharges on credit card transactions. If we do, we will no longer be able to accept credit cards. This is a standard agreement, and therefore I assume it is not possible to put surcharges on credit card transactions.</p>
<p>However, we are free to offer cash discounts. We don’t do it though. The credit card fees are built in into the prices.</p>
<p>For those of you who are in favor of this, you do realize that a lot of online retailers (PayPal, eBay sellers, discount online stores) will start to charge a surcharge for credit cards, even though they cannot accept cash? They’ll do this in an effort to hide the actual price of their item.</p>
<p>Gas stations in our area offer cash discounts all the time. Others now taking debit only (PIN based)-no credit cards. In our state you have to advertise the higher price on the large gas sign.</p>