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Credit Card Swipe Fees Begin Sunday In USA
An anonymous reader writes "A speedbump on the road to a cash-free economy will go into effect Sunday in the U.S., as retailers in 40 states will have the option of passing along a surcharge to customers who pay with credit cards. The so-called swipe fees arose from the settlement of a seven-year lawsuit filed by retailers against Visa, Mastercard, and big banks, who collect an electronic processing fee averaging 1.5 to 3 percent on transactions involving credit cards. The banks naturally have opposed the consumer surcharges, preferring that the extra costs to be passed along in the form of higher prices. Consumers in ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas) won't be affected, since laws in those states forbid the practice (it seems that gasoline station owners here in Massachusetts got a different memo, though). Also, the surcharges won't be collected for debit or prepaid cards."
I wouldn't think twice about having the clerk go, "there's a surcharge for credit", to which I'd respond, "OK, thanks anyway." and leave.
I wonder what it costs retailers to deal with cash? You have to count it, keep it secure, deposit it, etc. etc. More or less than the percentage for electronic transactions?
Credit card companies want to have their fees hidden, rather they'd have everyone else too pay for the fees they charge retailers of their lucky convenience-furnished customers. And that they no longer can? Honesty in retail, surely a big speedbump, yes.
And that's an issue, because everyone wants cash-free, Shirley. Because, uhm, cash doesn't carry your name and isn't subject to chargebacks, hallmarks of, er, what exactly?
What if their prices are lower than other retailers' with just the amount of the surcharge?
With this change, the retailers are going to give a 1 or 2% discount for people who use pin instead of signatures. Or even if they retain the savings themselves I would like the profit to go to my local retailer, not the too-big-to-jail banksters.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Doesn't matter. Working in retail I learned that individual customers are very much unimportant. Just because you come in every week and buy a couple things doesn't make you a valued customer and your business will not be missed. The majority of people will not care and will continue doing what they have been doing for years. Don't kid yourself in thinking your storming off will teach anyone a lesson. The clerk does not care (and they never do), the store does not miss your purchase, and the next customer moves ahead in line that much faster. Most often the clerk will joke about you with their colleagues about that guy who couldn't afford the fee and he got mad and left. Made us put his items away too. What a prick.
Carry cash or use a debit card. Might as well make it easier for yourself than anyone else.
I have a feeling people who live close to the 10 states where it doesn't apply might very well end up shopping across the border starting tomorrow.
Well, realistically, I'd probably not have gone in the store in the first place if they implemented it, because I'd have hopefully done my homework.
That said, I think it would be important that store owners have a chance to hear their employees go, "yea, I had to put 3x as much stuff back on the shelf today because people keep saying no thanks when they try and charge items to their credit cards".
Other than groceries, I do very little shopping in-store now anyway -- I do most of my shopping online.
Actually, when the store owner has to start paying his employees more money to put shit back on the shelf, he may start rethinking if that money on the credit card fees is more worthwhile.
I use a credit card for two reasons. /everything/ on my credit card. Only thing I don't is my mortgage and that's just because I can't. I pay it off every month. Companies that are going to make this less advantageous for me are going to get less of my business.
A) If someone swipes/steals that information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
B) Rewards programs. I get thousands of dollars a year in rewards. I put
AS soon as consumers get the option to "Pay less in cash" -- because "pay more with credit" is more emotionally troubling, then the real cost of Credit Cards can be visible.
They don't really pay anything, just the difference between accounts from other banks - -but they charge a hefty fee on retailers and charge interest (compounded) on consumers.
There are new options that charge less, and they will get more prevalent if REAL COSTS are factored in. Not allowing retailers the option to pass on costs was only a benefit to the credit card companies -- it doesn't really save you money over time.
>>"ad space available -- low rates!!!"
(it seems that gasoline station owners here in Massachusetts got a different memo, though)
Despite the fact that the outcome is similar, there's a legal difference between "surcharge for credit" and "discount for cash". The former is/was illegal, the latter is legal. Presumably gas stations in MA and elsewhere are doing the latter.
I get thousands of dollars a year in rewards.
Interesting... you get free money, and wonder why there may be fees now?
And full of Texans. :(
So we kicked Iran out of the SWIFT international monetary system, and what did they do? Trade everything in gold to Turkey and China. We've lost the ability to track what they're buying.
The government wants to track everything you buy - hell, Target wants to track everything you buy - and what this will do is make everyone use good old cash. After a while that 3% surcharge will feel like chump change to people who've lost their entire demographic database of purchasers.
I want to delete my account but Slashdot doesn't allow it.
I use a credit card for two reasons. /everything/ on my credit card. Only thing I don't is my mortgage and that's just because I can't. I pay it off every month. Companies that are going to make this less advantageous for me are going to get less of my business.
A) If someone swipes/steals that information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
B) Rewards programs. I get thousands of dollars a year in rewards. I put
If you think these benefits are worth it, why should others who don't benefit share the cost?
I prefer to pay by credit card as well. It allows me to differ the payment and to get reward points. The problem is that it's not free. People that don't pay by credit card shouldn't be forced to pay as well - unless that's the store's policy. In that case people who insist on paying with a credit card will be free to find a better deal elsewhere.
"No oppressive state income tax"
No, just higher property taxes, which you must pay regardless of your income.
If your children ever found out how lame you are, they'd murder you in your sleep
You do know you've been paying that fee all along don't you? It is the transaction fee the credit card charges the merchant. All this is is that they won a lawsuit invalidating the contract term that forced them to hide the fee in the form of higher prices for everyone (including cash customers).
If you don't like the fee,, tell the credit card company "no, thank you", they're the ones charging it.
If someone swipes/steals [my credit card] information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
It isn't true that Visa eats the cost of fraud in most cases. When you want to reverse a charge, your bank and Visa/Mastercard happily oblige because they usually yank the money straight out of the merchant's account.
You are right that the cardholder has much more leverage to reverse bad charges on a credit card versus debit. After I had left GoDaddy, they made the mistake of hitting my debit account for one more charge. Reasoning with GoDaddy didn't work, so I filed a chargeback through Sovereign Bank. Long story short, Sovereign proved to be completely unable to handle it, and I didn't have the leverage of saying I wasn't going to pay the disputed amount.
Now, nothing has direct withdrawal rights to my money. No entity should have my debit card on file, nor any prior approval for ACH withdrawals. If they want to charge me every month, they do it on the credit card, or I can pay them via bill pay or (occasionally) check. I am aware that a sufficiently determined company can still get access to my checking account, but at least in that circumstance I can expect to be made whole in the end.
to any sort of cash-free economy. this is a roadblock to multinational financial institutions continuing to exercise carte-blance restraint in the way they charge fees for their services. A cash free economy and a privately controlled electronic banking system are two different things.
can we bite the bullet and conclude that electronic transfers and card based transactions are so ubiquitous as to become a right of the people? Grow some balls, amend a few laws, and lets make a national payment card system that works with our existing currency and doesnt require some per-swipe "fee" to pay for a server to connect to a database and decrement an integer over SSL.
Good people go to bed earlier.
Thats why you work in retail and don't OWN a retail store. The owner knows that every individual customer is very important, and everyone that stops shopping at their store is money out of their pocket.
And that's exactly why the whole thing was a scam that needed to stop. Why should cash paying customers help foot the bill for your cash back?
The other retailer is not discouraging the use of the card, he's just no longer subsidizing your costs by adding it to everyone's price.
If I, a cash customer, can stop paying your fees, I'll happily shop at the retailer you boycott.
The whole thing is just a scare story anyway, only a few retailers are ever likely to exercise this ability anyway (just like few gas stations charge different prices anymore for cash vs. credit, not even Arco). From NBC news:
The big question is: Will any stores do this? Should you worry about paying a credit card surcharge?
"We have discussed the settlement with many, many merchants, and not a single merchant we have spoken to plans to surcharge," Craig Sherman, spokesman for the National Retail Federation (NRF), said in a statement. The NRF was not involved in the class action lawsuit.
NBC News contacted some of the country's largest retailers. Wal-Mart, Target, Sears and Home Depot said they have no plans to add a credit card surcharge.
"95% of all Slashdot
You've never worked in retail, or you'd know that employees have to put stuff back on the shelves /all the time/. I worked in a grocery store many years ago and we had to put a full cart's worth of stuff back at least once a day - they were either dropped off at checkout ("I don't want this") or haphazardly shoved onto the wrong shelf when someone changed their mind & was too lazy to put it back themselves.
Hail Eris, full of mischief...
E pluribus sanguinem
The other retailer is not discouraging the use of the card, he's just no longer subsidizing your costs by adding it to everyone's price.
If I, a cash customer, can stop paying your fees, I'll happily shop at the retailer you boycott.
Except it won't work out that way. You will still be paying the same price you've always paid (including the baked in fee) and the retailers that implement it will be getting an extra influx from the fees they charge to CC users.
There's no reason it can't come from the people who don't pay it off at the end of every month.
There's no reason it can't come from the generosity of the Grey aliens, sharing the bounty of their far-reaching interstellar empire with us. This is classic free lunch thinking here.
Your contract with the credit card companies didn't include specifying where your "reward money" comes from. Hence, it comes from the greatly expanded fees the credit card company charges on your transactions which from the credit card company's point of view is the logical choice. They'll just drop the rewards system gimmick altogether, if they can't continue to hide transaction fees from you.
I wholeheartedly agree. Putting the cost on the card users is the right way.
When you are sure of something, you probably are wrong (search for "Unskilled and Unaware of It").
If you don't like the fee, tell the credit card company "no, thank you", they're the ones charging it.
Mod parent up. Visa has a near monopoly in taking a cut of all transactions, and you want us to get upset at all the retailers who don't want to submit cheerfully? Think about what you're trying to do for a second. As long as the Visa tax is hidden, no one can ever try to do it for less. Customers will always choose the bigger more-convenient card that works everywhere.
Guess who pays for the rewards programs? That's right. It's the retailers. Credit card companies charge retailers more for the rewards program credit cards. You don't think Visa is actually giving you money do you?
I use a business credit card with some huge multinational companies charging up hundreds of thousands of dollars in business each year. I don't feel too bad about taking airmiles from them. But I do feel bad about taking rewards from little mom and pop retailers. Visa had them over a barrel. If they wanted business they have to accept credit cards. But if they want to accept credit cards they have to do it on Visa's terms (until now), which were higher fees for rewards cards, and Visa would not allow them to pass any of those charges on. It's quite a racket, actually.
Not sure where you got this individual consumers don't matter but for small retailers "every" customer matters. I'm not talking about "the customer is always right" because I will tell someone to fuck off if they are unreasonable, oh a I do own a successful retail store. If the clerk does not care you haven`t taught your employees properly of they don`t respect their job/you/you business to care enough.
Personally if I can make profit I will go out of my way to satisfy even the smallest customer. For example on Monday I have a special order for a customer that came in yesterday. Normally if I ordered this item on Fri I wont get it till Tues/Wed so I'm gonna go out of my way on the way and drive to the distributor to pick this item up on Mon. Yes it'll cost me $5 extra in gas and 45min of extra driving but instead of making $35 on the item I'll make $30 and the word of mouth of how she was treated by the store will bring me in more business. 90% of my return customer is word of mouth because I've gone out of the way for them even if it meant I had to make less profit on a sale of two.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
Except it won't work out that way. You will still be paying the same price you've always paid (including the baked in fee) and the retailers that implement it will be getting an extra influx from the fees they charge to CC users.
Is there a difference? Prices fluctuate all the time. Either you charge a lower cash price or you don't. Since the merchants themselves have up to a 4% penalty for CC purchases it would seem reasonable to give up to a 4% discount for cash purchases.
If customers actually had to pay the 4% for using their card the cc companies might start having to compete with each other for processing fees. Cards with lower fees might start to be preferred by the customers themselves costing the greedier cc companies a lot of business. I'm not sure preventing retailers from passing on the charge is actually a good thing for consumers. If I can save money by not using a credit card I'd prefer to have that option. I don't see anything wrong with having different cash and credit prices.
Quite an experience to live in fear, isn't it? That's what it is to be a slave.
I use a credit card for two reasons. /everything/ on my credit card. Only thing I don't is my mortgage and that's just because I can't. I pay it off every month. Companies that are going to make this less advantageous for me are going to get less of my business.
A) If someone swipes/steals that information, they're stealing VISA's money, not mine. If I use a debit card and they steal my info, they drain my bank account, my mortgage bounces. That's bad.
B) Rewards programs. I get thousands of dollars a year in rewards. I put
If you think these benefits are worth it, why should others who don't benefit share the cost?
Nobody held a gun to the heads of retailers and forced them to accept credit cards. They entered into these agreements with the CC companies in the first place because they knew they'd do more sales if they could transact more easily. If the customer is about to make an impulse buy but don't have the cash and must first find an ATM or bank, they might rethink the purchase and not come back. If a customer is using cash they generally have a much better idea of how much and how fast they are spending money and spend less of it. Sure there are the small minority of card users who keep receipts, track everything carefully, and pay it off each month; but that's few.
Big retail LOVES credit cards. I used to data warehouse work for a certain large home store chain. One of the first things you notice is that when the tender type is CC, customers not only spend more but they also had far more average items per ticket. Trust me it might not be core business but lots of revenue was driven by those ridiculously marked up Gator bottles, strange screw driver contraptions imported by the truck load from Asia for pennies, and other junk nobody really needs for anything.
The reason those others should share they cost is they are getting benefits as well. Maybe not as many and maybe not as direct but they are there. Stores can carry a wider variety of merch, they guy in line ahead of you checks out faster just to name two. My question to you non CC user is why aren't you using one? Can't manage your money? I agree with the grandparent as well those rewards programs can be VERY VERY good if your careful. Make sure you understand the fee structure on them, make sure you buy the right things on the right cards. Don't hate us players.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
99% of the time cash is faster than cc. Most people don't use exact change. And armed robberies are not my problem. I'll let the insurance companies worry about it. I like the anonymity of cash.
Quite an experience to live in fear, isn't it? That's what it is to be a slave.
I think the point is he and I do like like the processing fee and we like the current system where is rolled into the retailers general expenses. Some of it gets kicked back to me in the form of rewards and other CC company giveaways. I am collecting an economic rent for all the idiots out there who can't get a credit card because they destroyed their credit; or don't use one because they can't manage money they don't hold in their hand physically. I like that fine.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
That's what passing on the cost would do: bake the cost of processing a credit card into the price for the people WHO CREATE THE COST.
All this does now is slightly increase the cost to the credit card holders as it is just charging them rather than spreading it across the customer base. It also makes it very transparent to the consumer and becomes another factor in choosing to purchase at a certain retailer.
Some retailers will choose to not pass on the cost to those generating it. Others will pass on the cost similar to a tax. Yet others will pass on the cost via discounts for cash and maybe debit. It will be interesting to see which of the prior wins. 2-3% isn't much, but today it does affect where people shop for gas. So I think it will have an impact on sales and retail is a low margin business.
The whole point of credit is to increase volume. I think the retailers who do NOT pass on the cost will eventually win. Also the cost of manually handling cash is not small, just better covered up and has more unknown risk. So for small to some parts of middle level retail this may make sense as they already have the infrastructure for handling cash and it is underutilized. But for semi-large to large operations, any increase in cash transactions probably mean additional costs.
For the former, they will choose the discounts for cash. The later will continue business as usual. I don't see my normal shopping retails like Walmart, Amazon, Kroger, and Target changing anything. But maybe Walgreens and CVS will go the Aldi way. I am a credit card guy so I will probably adjust by lowering the volume I do in the smaller group.
I still don't see how offering a discount for cash or debit customers actually hurts you hardcore cc users. Cash/debit customers cost the merchant less. It's that simple. Their costs are up to 4% higher for cc customers. I don't see why cash customers should be forced to pay it just to give cc customers the illusion that using a cc is free when it isn't.
Quite an experience to live in fear, isn't it? That's what it is to be a slave.
Every single current US coin is minted by treasury, you moron.
Consumers in ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas) won't be affected, since laws in those states forbid the practice
California law prohibits adding a surcharge for credit cards, but allows a discount for cash: California Civil Code Section 1748.1. So while consumers in California may not be affected by the change in national law, they're already subject to the possibility of a higher price when using a credit card - and unlike states that will now allow surcharging, California receipts do not break out the difference in price as a separate charge.
Or you could just use a bank card...
Cash is faster? You must be joking. For the vast majority of my credit card transactions these days, I swipe the card while they are ringing up my purchases and walk away as soon as they finish. Most of my charges are under $50, so most of the places I shop don't even require a signature. Even when they do, my signature takes far less time than handing them cash, them fiddling around getting me change out of the drawer and handing it back.
99% of the time cash is faster than cc.
I've already swiped my credit card while the clerk is still scanning the first item. When they finish scanning everything, I might not even have to sign the screen (for a small enough transaction). For cash, you can't do anything until you get the total.
Most people don't use exact change.
Everywhere I shop, one end or the other of every cash transaction uses exact change. Either the buyer gives exact change, or receives it in return.
Lets see here....
Complete disregard for providing quality customers service. Check
Arrogant attitude. Check
Believe that providing a crappy shopping experience will not result in any financial repercussions for the company you work for. Check.
I can only conclude that you are an employee of Best Buy.
99% of the time cash is faster than cc. Most people don't use exact change.
Well, my personal experience is different but I was unable to find hard statistical data on that.
And armed robberies are not my problem. I'll let the insurance companies worry about it.
Exactly my point. Who pays the premiums?
I like the anonymity of cash.
Prepaid credit/debit cards. Available (for cash, even), everywhere. I use them for my online purchases.
I'm not a complete idiot... Some parts are missing.
99% of the time cash is faster than cc.
I don't think I've ever seen that. The purchaser has to count the cash, then the merchant has to, then they (or their till) has to calculate change, then they have to get the change. Meanwhile, someone paying with a card just pops it in, enters their PIN, and waits for the receipt to be printed. Or, for low-value transactions (under £15 in the UK, not sure about elsewhere), just waves the card over the machine and does the contactless payment thing.
And armed robberies are not my problem. I'll let the insurance companies worry about it.
They do. The amount of cash kept on the premises is factored into the cost of insurance. The cost of transporting it to the bank also increases when there is more cash, as does the cost of storing it, and banks often charge transaction fees when dealing with large amounts of cash. These costs are all passed on to the customers, including the ones who pay with credit cards, but apparently it's fine for card-payers to subsidise cash-payers, but not the other way around.
I am TheRaven on Soylent News
Consumers in ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas) won't be affected, since laws in those states forbid the practice (it seems that gasoline station owners here in Massachusetts got a different memo, though).
Visa/MC contracts still state that merchants have to have the same policy across their business. For larger chains that have a retail presence in these ten states, the prohibition on surcharging there means no surcharging anywhere else either.
From NBCNews:
Visa and MasterCard have rules that require retailers to handle credit cards the same way in all of their stores across the country. That means a chain with stores in any of the 10 states where a surcharge is banned would not be able to have a surcharge at any of its stores.
The settlement also states that merchants have to apply the same policy equally to their other cards that they accept, such as AMEX or Discover. Since AMEX still prohibits surcharging, if a merchant accepts AMEX they cannot surcharge for credit cards.
From NBCNews:
The National Retail Federation points out that under terms of the settlement, a merchant who adds a surcharge to purchases on a Visa or MasterCard would have to do the same with American Express cards. But AMEX prohibits surcharge fees. So a merchant who accepts American Express as well as Visa/MasterCard would not be able to surcharge any of those cards.
'The tyrant will always find pretext for his tyranny.' - Aesop's Fables
Is it really a cost, though? According to Mastercard's income statement, they earned $6.71B on revenue of $7.22B. That is, Mastercard is making plenty of money. Visa has similar margins. It sounds like their expenses aren't all that high, even with users like the grandparent post (and me) turning a profit on them by never paying any interest.
With that much cash on the line, in a simple scenario, retailers should be able to push back and play them off one another for a better deal. They could keep the profits themselves, or pass it on to their customers.
The retailers have good reason to want to encourage their customers to use credit cards. Handling cash is time-consuming and error-prone. The credit card companies are doing work for their share of the money (maintaining computers, accepting payments, sending bills, collecting, taking risks on default and fraud) but it sounds as if there's still a lot of room for retailers to push on them to get a service they want at a lower price than the one they're already getting, rather than having to pass a higher price on to the consumer.
It smells like a monopoly power: cheaper competitors should arise, but aren't, due to ... what? High barriers to entry? Collusion?
I agree with the grandparent as well those rewards programs can be VERY VERY good if your careful. Make sure you understand the fee structure on them, make sure you buy the right things on the right cards. Don't hate us players.
In that case, you shouldn't hate those of us who will play the game and avoid the paying credit card fees by paying cash.
How can we continue to believe in a just universe and freedom to eat crackers if we have no ale?
""The clerk does not care (and they never do),"
This is why the porno industry has lasted as long as it has in the face of the internet. While *YOU* as a retailer might not give a fuck, we *WANT* our customers to be happy, since that's, you know, part of the fucking business.
Porn, doing what you lazy fucks can't do as a matter of courtesy, since FOREVER.
"Doesn't matter. Working in retail I learned that individual customers are very much unimportant. Just because you come in every week and buy a couple things doesn't make you a valued customer and your business will not be missed."
Again, you're working the wrong sort of retail, and thus don't know what the fuck you're talking about and even if you did, you don't display that sort of ethic. Not to be unexpected from a nearly 2 millions digit UID.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
Having been to places where they can charge surcharges, large chains with ties to the US, grocery stores and gas stations will not surcharge, but small restaurants and owner run shops will charge the surcharge.
Learn to love Alaska
I'm in Georgia. Many small merchants here charge a 25 cent fee on any credit card purchase under $5, because they still have to eat the fee from Visa/Mastercard and for a $1 purchase, they'd make no profit. Or even better, one take-out restaurant gives you a 5% discount when you pay with cash. I expect more retailers will go along with a similar things in other states where this is now legal.
On the other hand, merchants will probably eat the fee for very large purchases still. You can't expect someone to pay for a $1000 car repair in cash. Also, store-brand credit cards better not charge this fee. I have a Macy's card because I got 20% off my Christmas shopping last fall, but I'd happily cancel it and cut it up if they want to add on an extra fee for using it, instead.
Occasionally living proof of the Ballmer peak.
You don't get it. You are not being penalized. Or the other way to look at is that right now, you are ALWAYS being penalized. The difference is that in future, if you care to pay by cash, you can avoid the penalty.
Although illegal in NY, it seems that gas stations have been doing this since gas rose above 2 bucks. Not all of them but some of them
have you seen my sig? there are many others like it but none that are the same
It actually happens quite a lot. There are several stores in this area which have a higher 'normal price' and then offer a 'cash discount' at checkout.
If the only way you can accept an assertion is by faith, then you are conceding that it can't be taken on its own merits
If you think companies such as Apple pay per-transaction for things like the iTunes Music Store, you don't understand how commerce works for giant corporations.
If they don't work out an annual contract price for their card processing, or somehow do it themselves, they are a lot stupider than I thought.
If the only way you can accept an assertion is by faith, then you are conceding that it can't be taken on its own merits
I'm curious. Where do you have to be that you can't spend 3-5 seconds while a clerk gives you change? What is so important that an extra couple of seconds would make a big difference? Even if you had 10 cash transactions per day, which is very unlikely, we're talking about half a minute over the course of 24 hours.
Are you on your way to diffuse a bomb attached to a timer or something?
As Idomeneus of Lampsacus said, back in the third century B.C., "Slow down, cowboy."
You are welcome on my lawn.
Then you should be mad at the CC companies and banks who have been sticking it to ALL OF US whether we used cash or credit than to the store who is trying NOT to assrape you if you pay with cash.
The whole point of the suit was the banks and CC companies said "Fuck 'em, just raise prices across the board 3% and we'll BOTH make out" to hide the fees. Me personally I'd be MORE likely to shop there as I could always use my debit or hit one of the bazillion ATMs in town and not get stuck with the fees that we were ALREADY BEING SADDLED WITH thanks to these asswipe companies.
ACs don't waste your time replying, your posts are never seen by me.
... somehow do it themselves ...
In the USA, it is illegal for corporations to do their own card processing. Walmart tried, and was smacked down by the federal government. Corporations are able to act as their own processor in Canada and Mexico, resulting in lower fees, but in America the incumbent credit card processors have too many politicians in their pockets.
Right now, I use Debit most, along with occasional Credit and Cash purchases. If any of the three options offered me a cheaper solution somewhere(even 1%), I'd use that one almost exclusively. I'm not too worried about my card being stolen - I take responsibility for my money. If it gets lost or stolen and someone empties my bank account, I will dispute it, but consider it a lesson learned. With cash, if it's gone, it's gone.
What I'd be most interested in is how merchants who run Debit transactions as a Credit(signature) will fair - will they all switch payment processors to someone who does (cheaper) debit transactions, or will they end up charging more for Debit as well? Only time will tell.
Either way, I think this is a good thing.
This law is more about the Mom & Pop corner stores that have always had to have a $10 minimum for credit card fees, now it might be more convenient for them to allow credit cards for a bottle of soda, provided they can up the charge and not lose money on the sale. It'll also encourage people to switch back to good old cash that way.
You were critically hit for no damage. The bruise will look nice, and maybe the scars will make good party talk.
The large chains probably have better deals with the credit card providers so pay less per transaction/sales dollar than the smaller places. This makes it more practical for the chains to include the credit card transaction cost in the product price.
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
Yes, yes, how very cynical of you. As an actual business owner that deals the vast majority of the time in cash and checks, and cringes when someone yanks out a credit card, I can tell you that we do NOT bake credit card processing fees into every purchase, because the margins required to compete are thin. This is an excellent change, because customers can actually see one of the costs.
And the next time it comes time to raise prices on that dozen eggs, perhaps it's 2% instead of 4%, because the CC processing fee won't be baked in, and it will be business as usual.
Bottom line, the fact that it's ILLEGAL for businesses to even inform customers of this, but to keep everyone IGNORANT of the true cost baked in is UTTERLY STUPID AND WRONG. Who the hell paid for the original legislation? The only ones it benefits are the credit card companies.
Qualitas edurus commercium, nullus penitus net rimor, nullus deus beneficium
"You have stores like Walmart that sell cheaper versions of similar products for less; but typically not the same products."
Actually, most of the "cheaper" brands such as sold in Wal-Mart, and under house names like Western Family and Kroger, are in fact the same products. They've just been "rebranded" with a different label.
There are exceptions, but that is the most common practice. Those "generic" products aren't entirely new companies competing with the established brands; they ARE the established brands.
Except some banks are also charging you to use a debit card (trying to push you to push credit at the register). http://www.dailyfinance.com/2011/08/16/wells-fargo-3-debit-card-charge-a-sign-of-more-bank-fees-to-co/
So, now, you're screwed no matter what.
In Vegas they don't even have to post both prices. So inevitably they post the cash price and you get a surprise at the pump (or if you aren't paying close attention, at the end of the month when you get your credit card bill).
When information is power, privacy is freedom.
> I've had fraudulent transactions reversed quite a few times over the years with my debit card.
There's a big, HUGE difference. The difference isn't that the charges won't EVENTUALLY get reversed... the difference is that one immediately empties your checking account, while the other is mostly an abstract paper loss.
If someone steals your credit card and makes fraudulent purchases, you submit the paperwork for the fraud claim, and that's pretty much the end of it until they finish their investigation.
If someone steals your DEBIT card, they can drain your checking account to zero, and possibly even overdraw it by a thousand dollars or more. If your finances are shaky to begin with, having your checking account emptied or technically-overdrawn for a week or longer can have financially devastating consequences & set off a chain reaction of late fees, penalties, credit-score lowering, and reactions to that credit-score lowering that's almost impossible to stop, let alone undo, once it begins. When your checking account is overdrawn by more than $2,000 in fraudulent charges, even your direct-deposited paycheck is going to partially or completely vaporize into a puff of antimoney smoke. If you have a savings account that's liked to the checking account for overdraft protection, they can drain your savings account to zero, too.
It's hard to over-emphasize just how completely you can be fucked by debit card fraud, and the fallout (in the form of fees and penalties from others, plus damage to your credit score) can persist and keep doing damage LONG after the fraudulent purchases themselves have been reversed.
Yeah, this is true. For example Target pays $1 million each day to credit card companies due to fees. That's why they always try and get you to sign up for a store card, saving 5% on each of your transaction actually still saves them money overall.
No it doesn't. There's no way they pay anywhere near 5% in fees. I ran a part-time small business, and my sales were miniscule...a few $K per year. I didn't have a card swipe machine (used a knucklebuster instead) which meant I payed a higher rate (over 3%). Plus since I called in my transactions over the phone (touch tone), they charged me an additional 99 cents per transaction (on top of the regular 40 cents). Even with all that, my average overhead for a credit transaction was something like 4.9%.
The real reason they offer the 5% discount can be found on their annual report. Here are their revenues from 2011
Credit card revenues: $1.4B
Credit card expenses: $446M
Yes, that's right...their credit cards actually EARN them money. That's from all those suckers carrying a balance paying 22.90% interest, and forgetting to make their payments thus paying $35 fees. That's the reason you see the most ridiculously branded credit cards. Everyone wants in on that money maker.
It's whatever the store is willing to eat if it goes badly. They know how many people dispute it and how much it will cost vs. how much time they save and what that's worth to them.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
The large chains probably have better deals with the credit card providers so pay less per transaction/sales dollar than the smaller places. This makes it more practical for the chains to include the credit card transaction cost in the product price.
It will be an even better deal when they can just advertise that they don't surcharge. I'll stop there first.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Paying by cash is not free for the merchants. Merchants would save money if they could eliminate cash. First there is the cost of stocking each register with change money. $10,000 in change money is $10,000 that can not be used to pay bills. Than there is the cost of ensuring the employee does not steal any of that money. Than there is the cost of an employee to wait for the customer to count their money and the cost of counting their change. Than there is the cost of an employee to count all the money and to document and balance the cash. Than there is the cost of an employee to deposit the money in a bank and a safe to keep the next days change money. There will always be mistakes in counting either the money given or change given back. If a register is manned by more than one person than there is no way to know for certain who is at fault if there is a shortage of money. Today it is much faster to do a transaction with a card than with cash so the person behind the till will do a lot more transactions so their cost will be lower. If anything should be done there should be a fee for using cash. I know that I would feel safer if I knew there was no cash in the till for anyone to steal and that goes for when I am a customer and when I work behind the till.
That's correct except for the smaller charges. It is cheaper to use CC for amounts less than $35 because of the smaller per transaction fee. Over $40, the debit becomes cheaper. But yes, cash is most definitely king. ;)
That depends... to the typical person who is poor, they're going to use cash and checks (and maybe debit) anyway. Why? Because most will have cashed their paychecks at the grocery store, Wal-Mart, and suchlike. The advertised discount is a bonus to 'em.
We have something similar here in Oregon; the "am/pm" (Arco) gas stations. You pay a surcharge if you use plastic (debit or credit) to buy your gas. The stations are usually packed to the rafters - they're often sited in the less prosperous areas of town. The average price per tankful (say, 15 gallons) works out to around 10 cents less per gallon if you pay cash.
Not defending it or suchlike, but take it as you will.
Quo usque tandem abutere, Nimbus, patientia nostra?
(usual /. disclaimers apply, IANAL, YMMV, etc) Ah, but that has never been illegal. Labelling it a cash rebate or a cash discount has been legit for a while now. Labelling a higher price for credit cards has not. Very fine line, but interesting one nonetheless.
"Don't meddle in the affairs of a patent dragon, for thou art tasty and good with ketchup." ~ohcrapitssteve
The moral of that story is don't use the large banks which I've found generally have shittier service and higher fees anyway. In just about every town in America you have smaller banks and co-ops and they not only have lower fees (my bank charges a whole $1 a month for my debit card flat fee) but they tend to have better service.
So just do your homework and I bet you'll find there are plenty of banks in your area that will be happy to take your business without screwing you on fees.
ACs don't waste your time replying, your posts are never seen by me.
The logic is (almost) sound. I see a few points of failure here...
* A typical register will have something like $50 in change sitting in there, with maybe $50 as backup for every two registers or so. A typical large local grocery store with 20 registers would barely need $1500 in change money sitting around, with maybe $500 more for the customer service desk. Way short of your $10k figure, and the excess gets deposited nightly at the nearest bank anyway as income, where it gets put to use for the business. Even on a macro scale (say, Wal-Mart), $10k would easily cover change for 3 or 4 supercenters, or what you'd find in a typical city. Compared to the hundreds of thousands of bucks that those 3-4 supercenters suck in each day, $10k is chump change.
* If you have a bank branch for your business' bank close by and it's during most of the business' open hours, you just go get more change - takes a few minutes, tops (you notice it's running low, you go get more...)
* CC transactions often take just as long, if not longer than cash. The transaction has to be authorized before you're done, grocery purchases can be half-and-half (say, half debit, half EBT), etc.
* What if the buyer doesn't have enough to pay for the complete purchase? Any time the cashier turns and says "I'm sorry, your card was declined", everyone in line waits while a guessing game is played: how much does the declined shopper have in his/her account, as transactions are re-run multiple times to find out? With cash, both parties know on the spot how much the buyer is short, and can adjust accordingly.
Quo usque tandem abutere, Nimbus, patientia nostra?
Interesting... you get free money, and wonder why there may be fees now?
Apparently you are not familiar with the term "interest". The money is not free.
Apparently you are not familiar with the practice of paying your credit card bill in full each month. In that case, from your perspective, it is indeed free. (note that this is financed by the customers who do *not* pay their bills in full and also by the retailers paying fees for credit card transactions)
If they ever threaten to eliminate cash it will represent a huge increase in governmental control. Poor people like cash because they can buy "on the sly" avoiding taxation altogether.
A cash free economy essentially means perfect tax collection for the .gov as well as perfect control over the economy. This sounds even worse when you consider that power in the hands of an oppressive regime. Economic freedom is one of the most basic freedoms of all.
I have mod points. The reign of terror begins now.
Signatures? How quaint. I remember that from the last century,
Sig out of date
Hello,
I've shopped at retailers who post signs asking people not to use credit cards so they can keep prices low.
At those retailers I respect that and use cash. Try it, it might help you a bit. I also try to make it a habit to tip in cash.
Best,
--PM
I get thousands of dollars a year in rewards.
Interesting... you get free money, and wonder why there may be fees now?
It's not free money, it's a kickback. "As long as you are going to buy that HDTV anyway, why not use our credit card? We'll get the merchant for 4% and give you 1%..."
And you payed 4% higher price because of it, so here, we will make that easier and make it so you only lost 3%....
When you cant win, ad hominem.
I'll shop where it's cheapest, or the service justifies the premium, rather than irrationally ignore the best deal because of how the price is structured.
A small sandwich shop for example could easily be losing 10% of the sale price to processing fees. If they think they can make more money and/or price more competitively by charging a surcharge then I'm happy to see them try.
The UK has allowed and it doesn't really make much difference. Some smaller shops will only accept payment above a certain amount by card. Other, typically high cost but low margin, products will include a surcharge for using a credit card. Even if it doesn't become normal it at least gives shop keepers an alternative to refusing to take cards and that will hopefully stop the card providers gouging too much in their fees.