Credit card "tax"

[Dorkus]

The misses and I were talking the other day how some businesses are now putting a fee on top of credit card payments. Buds has always done it but now we are talking local stores and services in our area. I remember back in college I was told this was against the credit card agreements to do so, yet that was in the 80s so maybe it has changed.

I get why they are doing it, yet the purpose of a credit card is guaranteed payment and more security for the seller and buyer. Seems like a short sighted business plan but my concern this may be a growing trend based on what I am seeing.

I will be honest, this makes a difference at where I shop and won't pay that fee out of principal. Anyone else have a thought on it?

 

[chazroh]

Depends on the business in my opinion.

 

[rickm]

What it comes down to is they are wanting the customer to pay for the fee that the credit card companies charge instead of the business paying for it cutting into their profits its all about the dollar that they get to keep.

 

[Shinneryfarmer]

Yes, They have started charging a fee at almost all restaurants around here. Just Friday one put that on the ticket when the wife and I had lunch. I just laughed and paid cash, they had to redo the ticket. We had to wait while the waiter went around trying to gather enough money to make change. Come on it was $34.52 and I gave him a $50 dollar bill. I refuse to pay it, most have known there was a fee and adjusted their prices to compensate. Now they want to add the fee on top. Alot of local businesses will give you a discount if paying with cash because their prices reflect that added fee, so technically you are now paying it twice when they add it to the ticket.

 

[SoonerP226]

I'd bet that most places you're seeing that are smaller businesses. The fees don't seem like much, but they can take a big chunk out of their bottom line--you have to remember that the percentage isn't taken out of the cost of the item, it's taken off the top.

A friend used to own a LGS, and he figured it up one day. If a customer came in and ordered a rifle, you had the cost of the rifle (including the shipping & handling to get it delivered), plus the minimal fee he charged for handling the transaction, plus the vig that the tax man took. When you added all that up and the credit card processor took their percentage out of the total, they were actually making more on the transaction than he was, which meant he was actually taking a loss on it.

 

[OKRuss]

Our vet charges 3.5%, dog kennel 3%. Guess we're going backwards and will start writing checks which the business has to consolidate and deposit on their time.

 

[ConstitutionCowboy]

I believe the best way for a business to handle the credit card fees is to build the fees into their cost of doing business. To make it fair for those who pay cash, a discount can be applied to cash sales, equivalent to what the credit card fees would be.

Transactions by check are handled just like a credit card or debit card payment and the check is generally handed back to the buyer(Some businesses retain the processed check.) as the transaction is completed via an Electronic Funds Transfer (EFT), via an Automated Clearing House (ACH), so no discount for paying by check.

Easy-peasy.

Woody

 

[1shott]

IIRC CC companies can remove a business from the ability to accept their cards if they charge a fee.

That policy may have changed but years ago it was like that.

 

[Pstmstr]

Most places just jack up their prices to cover credit card fees. I like the idea of cash discounts. I doubt that a bill of $35.72 versus $34.52 at a restaurant would be a deal breaker for me. Unfortunately, we are quickly becoming a cashless society not to mention credit card debt is at an all time high. Some will tell us we could get 71 cents back on that same deal with cc rewards points so you would only be spending $1.20 extra to earn .71.

 

[1911DA]

I'm noticing a lot of doctors offices and pharmacies are not taking checks........ it's cash or credit cards only and payment at the time of service and they won't send an invoice...........