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Credit Card Surcharges... Again?

GottaGo

GottaGo

Rock and a hard place
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Developments in two cases in the last week have the potential to change pricing practices everywhere from big box retailers to corner coffee shops — but whether they actually do remains to be seen.
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An Easing of Rules on Charges by Amex - Yahoo Finance

Here we go again.... and not for the good of the consumer. For those of us who use credit cards as a means of keeping track of expenses, our expenses possibly just went up. Me, I'll be favoring those merchants who don't implement the surcharge, at least not as a visible difference in pricing.

Interestingly enough, most business accounts at banks also charge for the handling and depositing of cash into the account, so why would they single out credit cards?
 
I'm not a large fan of the plastic in the first place. Only use it when there is no other option.
 
I'd never used a debit card til this past year and was stunned to find out that it often has a surcharge. I guess it's only a matter of time before even accepting cash will cost extra because someone has to drive it to the bank. USA businesses are surely learning how to nickel and dime the masses. I'd have some understanding if the banks weren't still making so much, such that if anyone were to eat those extra charges, it should be the banks, not the merchants.
 
GottaGo said:
An Easing of Rules on Charges by Amex - Yahoo Finance

Here we go again.... and not for the good of the consumer. For those of us who use credit cards as a means of keeping track of expenses, our expenses possibly just went up. Me, I'll be favoring those merchants who don't implement the surcharge, at least not as a visible difference in pricing.

Interestingly enough, most business accounts at banks also charge for the handling and depositing of cash into the account, so why would they single out credit cards?
Click to expand...

You were already paying more.

When a retailer opens their merchant statement for the first time and thinks to themselves "Gee, I just got whacked 2.4% for letting people use credit cards!" Their next thought is pretty much always "Well, if I raise prices by 3% that will cover my margin".
 
GottaGo said:
An Easing of Rules on Charges by Amex - Yahoo Finance

Here we go again.... and not for the good of the consumer. For those of us who use credit cards as a means of keeping track of expenses, our expenses possibly just went up. Me, I'll be favoring those merchants who don't implement the surcharge, at least not as a visible difference in pricing.

Interestingly enough, most business accounts at banks also charge for the handling and depositing of cash into the account, so why would they single out credit cards?
Click to expand...


Heya GG.
hat.gif
Looks like it will be with all of them soon enough. I am glad I don't use them anymore.

On Thursday, a group of small and midsize businesses reached a settlement agreement with American Express in a class-action lawsuit. Under the agreement, which a judge must approve, Amex will allow surcharges to its cardholders as long as the same amount is levied on other credit and charge card users. It agreed to drop a measure that required debit card surcharges at the same level, according to a lawyer representing the company.....snip~
 
The difference between a credit/debit card surcharge and a cash discount is not worth discussing. These cards have both advantages and disadvantages, over cash/checks but it should certainly be left up to the business how they establish their prices, discounts and service charges.
 
iacardsfan said:
I'm not a large fan of the plastic in the first place. Only use it when there is no other option.
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As I mentioned, I use credit cards for record keeping purposes. They are paid in full each month.

Seeing the expense of credit cards from the merchant's end of it, there are up charges for every imaginable type of card, corporate, international, rewards cards, private issue cards, etc. There are even up charges for debit card use, so I'm not seeing why they singled out credit cards for the 'surcharge'
 
Lutherf said:
You were already paying more.

When a retailer opens their merchant statement for the first time and thinks to themselves "Gee, I just got whacked 2.4% for letting people use credit cards!" Their next thought is pretty much always "Well, if I raise prices by 3% that will cover my margin".
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But that is across the board when they raise prices in general.

2.4%? That must be the big retailers, based on dollar volume. Most credit card fees (including surcharges for all the different types) run closer to 4% for the merchant.
 
ttwtt78640 said:
The difference between a credit/debit card surcharge and a cash discount is not worth discussing. These cards have both advantages and disadvantages, over cash/checks but it should certainly be left up to the business how they establish their prices, discounts and service charges.
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I agree whole heartedly, however I make it a point in my business and dealings with other businesses to NOT charge or pay directly fee's on top of what I already negotiated. I demand and get generally flat rates with all costs added into the price, anything less as far as I am concerned is bull**** for me or my customers. I make it a point to deal with merchants and vendors whom practice transparent pricing, flat pricing for goods or services as practicable and with the exception of government mandated taxing which is made known upfront.
 
GottaGo said:
But that is across the board when they raise prices in general.

2.4%? That must be the big retailers, based on dollar volume. Most credit card fees (including surcharges for all the different types) run closer to 4% for the merchant.
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Yeah. The surcharge tends to go down with higher volume. I pay roughly 3.5% but if I have 500 transactions a year that's a lot. Most of my restaurant clients are in the low 2% range.

As far as across the board price hikes...you bet! It's just good pricing policy because if you offer a lower price for paying cash then people will feel like they're getting screwed.
 
ttwtt78640 said:
The difference between a credit/debit card surcharge and a cash discount is not worth discussing. These cards have both advantages and disadvantages, over cash/checks but it should certainly be left up to the business how they establish their prices, discounts and service charges.
Click to expand...

Depending on what you're buying, and how frequently, it can be quite a difference. At gas stations that offer the cash discount, I'm willing to pay the little bit extra to pay at the pump, so I don't have to go inside the convenience store and deal with the rag tag bunch of squalling children, intoxicated people and the smoke stench hanging over some people.

Will retailers who chose to go with the surcharge post it before you go into the store? Likely not, so you can find out later once you find what you want, and decide if it's worth the extra money to you.
 
PirateMk1 said:
I agree whole heartedly, however I make it a point in my business and dealings with other businesses to NOT charge or pay directly fee's on top of what I already negotiated. I demand and get generally flat rates with all costs added into the price, anything less as far as I am concerned is bull**** for me or my customers. I make it a point to deal with merchants and vendors whom practice transparent pricing, flat pricing for goods or services as practicable and with the exception of government mandated taxing which is made known upfront.
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What? If the vendor says that 20 8' PT 2x4s cost $65 cash/check or $70 credit/debit then you still know the price of that purchase. Transparency has nothing to do with this matter.
 
MMC said:
Heya GG.
hat.gif
Looks like it will be with all of them soon enough. I am glad I don't use them anymore.

On Thursday, a group of small and midsize businesses reached a settlement agreement with American Express in a class-action lawsuit. Under the agreement, which a judge must approve, Amex will allow surcharges to its cardholders as long as the same amount is levied on other credit and charge card users. It agreed to drop a measure that required debit card surcharges at the same level, according to a lawyer representing the company.....snip~
Click to expand...

Some of us don't like to carry cash, and certain transactions, like renting a car, require a credit card to initiate. I suppose you could pay the final bill in cash if it's permitted.

Debit cards allow too much easy access to identity thieves or mistaken transactions, unless you stay on top of what you have money wise in your bank account, it's quite easy to overdraw and that will cost you even more.
 
GottaGo said:
Depending on what you're buying, and how frequently, it can be quite a difference. At gas stations that offer the cash discount, I'm willing to pay the little bit extra to pay at the pump, so I don't have to go inside the convenience store and deal with the rag tag bunch of squalling children, intoxicated people and the smoke stench hanging over some people.

Will retailers who chose to go with the surcharge post it before you go into the store? Likely not, so you can find out later once you find what you want, and decide if it's worth the extra money to you.
Click to expand...

I would hope so, since I hate pricing surprises. Whether it is posted outside or at the checkout counter matters little to me - so long as it is posted (made known prior to the sale).
 
GottaGo said:
An Easing of Rules on Charges by Amex - Yahoo Finance

Here we go again.... and not for the good of the consumer. For those of us who use credit cards as a means of keeping track of expenses, our expenses possibly just went up. Me, I'll be favoring those merchants who don't implement the surcharge, at least not as a visible difference in pricing.

Interestingly enough, most business accounts at banks also charge for the handling and depositing of cash into the account, so why would they single out credit cards?
Click to expand...

I'm curious - do Canadian banks that have entered the US market in the past decade follow a similar surcharge regimen?

Here in Canada, our banks are probably better regulated and far better run. At the two major banks I use, I don't pay any fees for my accounts, I don't pay any transaction charges for debit or credit, I don't pay any fees for electronic bill payment - I can't remember the last time I saw a "fee" charge on any account I have, although getting cheques printed now costs about the same as a new car.

Clearly, banks charge retailers fees for the use of their banking products - credit cards and debit cards - these fees are, however, not transparent in any customer transaction and are likely mostly absorbed by the retailer as a cost of doing business. Since few people here pay with cash for anything over about $20 to $50, most retailers would have no customers if they didn't accept the normal plastic methods of payment. Debit is very big here.
 
CanadaJohn said:
I'm curious - do Canadian banks that have entered the US market in the past decade follow a similar surcharge regimen?

Here in Canada, our banks are probably better regulated and far better run. At the two major banks I use, I don't pay any fees for my accounts, I don't pay any transaction charges for debit or credit, I don't pay any fees for electronic bill payment - I can't remember the last time I saw a "fee" charge on any account I have, although getting cheques printed now costs about the same as a new car.

Clearly, banks charge retailers fees for the use of their banking products - credit cards and debit cards - these fees are, however, not transparent in any customer transaction and are likely mostly absorbed by the retailer as a cost of doing business. Since few people here pay with cash for anything over about $20 to $50, most retailers would have no customers if they didn't accept the normal plastic methods of payment. Debit is very big here.
Click to expand...

Consumer banks who issue credit cards usually go through one of the Big Boys like Citibank, and just take a small percentage of the fees as the issuing bank.

Fees on bank accounts are quite often based on your total combined balances (checking, savings, certificates of deposit, investments) if above a certain level, no fees, drop below that level, fees out the ears.

*said with a straight face* the high cost of paper checks comes from the special ink used on them so when the check is processed through the clearinghouse, the machines can read them. Also, the extra handling of paper checks to process through both the crediting and debiting accounts.
 
GottaGo said:
Some of us don't like to carry cash, and certain transactions, like renting a car, require a credit card to initiate. I suppose you could pay the final bill in cash if it's permitted.

Debit cards allow too much easy access to identity thieves or mistaken transactions, unless you stay on top of what you have money wise in your bank account, it's quite easy to overdraw and that will cost you even more.
Click to expand...

Yeah I have a debit/credit card.....but I rarely use it ever. Other than like something on a rental car. Which that isn't too often anymore. Stores.....I always pay cash.
 
i already don't carry a balance from month to month. an increase in the prevalence of surcharges means i'll only use it for online purchases and netflix.
 
ttwtt78640 said:
What? If the vendor says that 20 8' PT 2x4s cost $65 cash/check or $70 credit/debit then you still know the price of that purchase. Transparency has nothing to do with this matter.
Click to expand...

If I am doing volume business with said vendor its $65 regardless how I pay, the price is the same, unless I am EXTENDED credit. A credit/debit card is there for the MERCHANT to get MORE business. There's a price for that. Just the same as advertising. If my customers are paying me right now I am not going to quibble whether or not they are using plastic or not. That's what the fee's are, quibbling. They have the right to charge what they like, I as a business owner think its stupid to quibble. If it's that significant they should adjust their prices accordingly. Unless they want to haggle all the time with guys like me, who will. I have tiered pricing myself but its based on how much time I am extending credit not whether or not they are using plastic. The best price is the price were I get paid now, to do a job later, customers get very good deals. The highest price is for credit I extend for 90 days. I charge confiscatory rates for such credit extensions. Longer I just charge usury interest rates plus the confiscatory rates. Time is money and I charge for my time.
 
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ttwtt78640 said:
I would hope so, since I hate pricing surprises. Whether it is posted outside or at the checkout counter matters little to me - so long as it is posted (made known prior to the sale).
Click to expand...

I remember when banks said they wouldn't charge a surcharge on debit cards. I guess they lied.
 
PirateMk1 said:
I remember when banks said they wouldn't charge a surcharge on debit cards. I guess they lied.
Click to expand...

I don't recall banks saying that they would not ever do so, simply that to get you hooked they did not at first. My current bank, Wells Fargo, now charges a $10/month fee unless I make (at least) 10 debit card purchases during that month. The bank either gets their due from the vendors or from me - the vendors simply seem to want me to pay my own bank fees.
 
ttwtt78640 said:
I don't recall banks saying that they would not ever do so, simply that to get you hooked they did not at first. My current bank, Wells Fargo, now charges a $10/month fee unless I make (at least) 10 debit card purchases during that month. The bank either gets their due from the vendors or from me - the vendors simply seem to want me to pay my own bank fees.
Click to expand...

I don't know. I distinctly remember those sorts of promises its one of the reason I went the debit card route. Otherwise I would still be using checks. I may be going back to credit cards though and using the float again.
 
GottaGo said:
An Easing of Rules on Charges by Amex - Yahoo Finance

Here we go again.... and not for the good of the consumer. For those of us who use credit cards as a means of keeping track of expenses, our expenses possibly just went up. Me, I'll be favoring those merchants who don't implement the surcharge, at least not as a visible difference in pricing.

Interestingly enough, most business accounts at banks also charge for the handling and depositing of cash into the account, so why would they single out credit cards?
Click to expand...

Hopefully enough people will stop shopping at the stores that start doing this that it won't really take off.

If it does, I'll just go back to using my debit card. Only reason I have a credit card in the first place is for the cash back. I wonder if you'll start to see credit card companies promising to refund customers who have to pay the service charge, kind of like banks do with using other banks' ATMs. Otherwise I see credit card use dropping noticeably.
 
Let's see how it takes off first. You can ask Dick Durbin if tacking on fees all willy-nilly means that they'll stick.
 
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