Credit Card Surcharges

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djrez4
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Credit Card Surcharges

Postby djrez4 » Tue Dec 31, 2013 10:46 am

We've probably discussed this before, but it popped up on Twitter again this morning:

The settlements of class action lawsuits against Visa, MC, and Amex included an alteration of the merchant agreements that allow merchants to enact a surcharge for customers that pay with credit cards.

This pisses me off to no end. Every thoughtful business owner accounts for the cost of taking credit cards when pricing their goods or services. The argument the merchants advanced, that it would create savings and increase transparency that they could pass on to customers, is completely disingenuous.

I don't believe for a second that retailers who choose to take advantage of their new surcharging ability intend to offer a true "cash discount" to customers. That $50 bag of dog food isn't going to be $48.50 if you pay by cash. It's going to be $51.50 if you pay by card.

Retail pricing is and will remain opaque. Any transparency is an illusion and a credit card surcharge is not going to help. Merchants are completely happy keeping their other costs of doing business a secret: lease or mortgage payments, employee costs, and depreciation are the same as credit card processing fees. Every one of them is already passed directly to the customer. If you want to tell me that a surcharge for paying by credit card is in my best interest as an educated consumer, post your tax return on the door. Let me see every hidden cost I'm paying.

In fact, while we're at it, please post your political party affiliation and religious persuasion on the door as well. I want to make sure I agree with your opinions and morals before I support you with my dollar. The libertarian economic ideal of perfect information doesn't stop with a note on the register telling me I have to pay 3% more if I whip out my plastic. (That's tongue-in-cheek, if you couldn't tell.)

I can only hope that competitive pressures will keep merchants from charging more for credit card payments. Some large retailers have already decided that they would not utilize surcharges - Costco, WalMart, Home Depot, and Target have all issued statements.

I'm also glad that 10 states, including my own, have enacted laws making surcharges illegal.

Keep an eye out for opportunistic merchants. Vote with your dollar and tell them why you're walking out the door without making a purchase.
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MemberSince99
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Postby MemberSince99 » Tue Dec 31, 2013 11:52 am

Amen brother. You're preaching to the choir but it's a good sermon.


Of course it's just a profit grab for companies, who will of course trumpet how they are just looking out for the consumer trying to help those customers who pay with cash. It should be no surprise these are the same guys who shriek if the minimum wage goes up a dime in 15 years ranting how they are trying to save the jobs of their workers. (Yeah, sure they are, they just care so damn much for the poor you know).


I fully intend to follow what you said and not do business with those who add a greed fee, I mean surcharge, to credit card sales. Fact is as you said that was already built into their business model to begin with. We all know that, all the BS they will tell us aside. I will vote with my pocketbook. I'm sure they won't miss me, and hey being the customer I can go to the competition and I won't miss them either. It works both ways.


Just so you know, though, it will do no good at all to tell the cashier why. They probably would not even tell the boss, and they can't do a thing about it in any case. They just work there. Instead I suggest you contact the corporate headquarters if it's a large chain or establishment, otherwise speak to the proprietor. A large chain will probably thank you for contacting them, throw up some buzzword mumbo jumbo and do nothing, but if enough people do it they will start to notice.

daniel2304
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Postby daniel2304 » Tue Dec 31, 2013 12:37 pm

I don't think the legislation, or IRS will be happy with this. Cash discount usually associates with tax evasion.
I'm surprised that credit card companies like this idea too. Doesn't "cash discount" reduce their volume?
All my posts are my opinions. All my posts mentioned "you" are merely for discussion-purpose only. No advice is given in any post at any time. It is also impossible for me to put effort to verify every statement that anyone has given.

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djrez4
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Postby djrez4 » Tue Dec 31, 2013 4:25 pm

daniel2304 wrote:I don't think the legislation, or IRS will be happy with this. Cash discount usually associates with tax evasion.
I'm surprised that credit card companies like this idea too. Doesn't "cash discount" reduce their volume?


The card companies didn't like it. They agreed to it as part of a settlement in a large lawsuit. It was a concession to the merchants.
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MemberSince99
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Postby MemberSince99 » Tue Dec 31, 2013 4:34 pm

Seriously what do you expect in a system where greed is lauded as some kind of a virtue? As long as it's not minimum wage employees who are being greedy that is then it's communism.

daniel2304
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Postby daniel2304 » Tue Dec 31, 2013 9:56 pm

djrez4 wrote:The card companies didn't like it. They agreed to it as part of a settlement in a large lawsuit. It was a concession to the merchants.


Thanks for the clarification. I didn't follow this matter since the state I'm residing in already made it illegal.
All my posts are my opinions. All my posts mentioned "you" are merely for discussion-purpose only. No advice is given in any post at any time. It is also impossible for me to put effort to verify every statement that anyone has given.



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