Credit Card Surcharge Fees Starting Jan 27

For just about anything you want to get off your chest about credit cards.
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DavidNY
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Postby DavidNY » Sat Jan 12, 2013 2:36 pm

Merchants which take credit cards are already including credit card surcharges in prices regardless of the method of payment.


silver6054
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Postby silver6054 » Sat Jan 12, 2013 2:54 pm

DavidNY wrote:Merchants which take credit cards are already including credit card surcharges in prices regardless of the method of payment.


Right, and that is where the tension is going to be. Merchant A and B both currently charge $X for a widget. Merchant A puts up a big sign "No credit card surcharges, EVER!!!!" and continues to charge $X. Merchant B reduces the cash price to 0.98X and charges a surcharge so that credit card purchases cost $X.

Credit card junkies will go to either place (and maybe more "support" A because of the stand!) but some people might decide to go to B and pay cash, putting pressure on A if enough do. Of course, B's margin decreases, so profit depends on these increased sales.

And then of course there will be merchant C, who keeps the cash price at $X, and then imposes a credit card surcharge. Hopefully people won't reward that!

MemberSince99
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Postby MemberSince99 » Sat Jan 12, 2013 5:02 pm

David you are exactly right. They are. BUT what I imagine many of them will do now is add that surcharge and tell you how they were "losing" money on credit cards before so they have to charge you this, when all along they just built that into their pricing structure. I love being lied to while I'm getting screwed it makes it all the sweeter. When I tire of that, I'll head down to the car dealer and watch the professionals in action.

Maybe it's time to just go back to cash. Just have a gas card, where they won't screw you on it if you buy THEIR gas, and maybe one other general purpose card (or a Target card for the 5% discount), and to hell with all of these Mickey Mouse games, and spending money at these greedy shops. I think that money is a LOT nicer in my bank account anyway.

The only part of this that is a surprise to me, is the fact that the government hasn't yet jumped in to tax the surcharge, beyond sales tax of course. That's got to be next. God forbid we should have any of our own money left.

DoingHomework
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Postby DoingHomework » Sat Jan 12, 2013 5:37 pm

Wait a minute. I don't want to pay surcharges any more than the next guy. But there's something else that might happen. Merchants pay higher fees for some cards. Let's say Consumer X buys a widget with cash for $100, Y buys the same widget from the same merchant with a plain old Visa card (that has a merchant fee of 2.5%) and Z uses his SuperElite WorldPoints Platinum Signature Prime Excellence Card with a merchant fee of 5%. The merchant gets $100 from X, $97.50 from Y and $95 from Z. Seems to me like X overpaid doesn't it? If the merchant was happy to part with the widget for $95 the X paid more than he had to.

So a natural evolution of this will be for merchants to simply charge higher surcharges for premium cards that charge them higher fees. Initially this seems to suck. But premium card holders will complain to the issuers or just cancel or use other cards. Ultimately the issuer will have to get clever and make it more attractive to use premium cards. That means better perks.

As a merchant I don't charge people surcharges and currently don't plan to do so. But it does get annoying when people want to use a card that I know I get charged more for with absolutely no benefit to me. I do think that it is inevitable that merchants will start being charged the same for all cards and cardholders will start having to pay highers fees for premium cards. That is already happening with services like Square.

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Postby Randiesel75 » Sat Jan 12, 2013 5:55 pm

I'm very naive to this and had no idea the premium cards cost merchants more. My understanding was that all cards cost the merchant the same. I figured it was the higher APR on these reward cars that helped the card issuers afford to provide the benefits.

silver6054
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Postby silver6054 » Sat Jan 12, 2013 6:31 pm

Randiesel75 wrote:I'm very naive to this and had no idea the premium cards cost merchants more. My understanding was that all cards cost the merchant the same. I figured it was the higher APR on these reward cars that helped the card issuers afford to provide the benefits.


No, because a lot of reward card holders won't have a balance so the APR doesn't matter. It's because they get more per swipe on reward cards that banks have been pushing them. Everyone benefits except the merchant....

jrv
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Postby jrv » Sat Jan 12, 2013 7:21 pm

Just saw this today when I went to buy lunch. A charge of $.50 if using a credit card for purchases of less than $8.
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MemberSince99
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Postby MemberSince99 » Sat Jan 12, 2013 10:53 pm

jrv wrote:Just saw this today when I went to buy lunch. A charge of $.50 if using a credit card for purchases of less than $8.


Time to bend over and grab our ankles again.

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Postby Bksuper » Sun Jan 13, 2013 8:33 am

Many of the restaurants near campus have been accepting credit but requiring you to pay $0.50 for under $5 if you do, against visa merchant contracts since they accept visa, since I've been at my school (August) and probably longer. They seem to prefer to charge a surcharge and face the consequences if caught. And this is in California. My official school book store, run by a big corporation (Barnes & Noble) ID'ed me to use my credit card to purchase textbooks and the clerk admitted it was because it was a Visa Signature and that cost them more. Merchant contracts seem to mean nothing to merchants, gov. restrictions or not.

@Doing Homework: I see your point with the widget example; credit cards and especially rewards credit cards are reducing consumer and producer surplus.
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Postby djrez4 » Sun Jan 13, 2013 8:58 am

Well gosh, guys. Why don't we return to the barter system? Obviously cash doesn't work and now credit cards make Member feel like he's getting violated in the pooper. There's nothing left but to trade directly with merchants. That'll work, right?

If we're getting hosed now, we've been getting hosed since day one. Like DavidNY said - the swipe fee is already included in the price. It's a stupid merchant that doesn't account for the fee as an expense of doing business and adjust accordingly. Any merchant who adds a surcharge now is taking advantage of you.

I frequent a restaurant that doesn't accept Amex because they think the swipe fee is too high. The owner told me it was 5% - which is complete BS, but whatever. All of the prices on the menu end in ".95." Round those up to the nearest dollar, enjoy a bit more revenue, and take my damn Amex.
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