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Super Contributor
marty56
Posts: 5,672
Registered: ‎10-06-2007
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Re: Merchants may be allowed to charge extra for credit cards

In NY, gas stations used to have 2 prices for gas, one with cash and one with credit.  I do not know if they still do.

 

Yesterday at HEB, I paid .88 for some Ibprofen and will get .10 cashback from my CU for using my debit card as a credit card.  How can they (both) expect to make any money on that?  Also gold and silver sellers like APMEX charge extra for using a CC.

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Watchmann
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Registered: ‎05-14-2008
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Re: Merchants may be allowed to charge extra for credit cards

Get over it folks.  Many people have fallen for 'free lunch' concept of life when it doesn't exist.  The entire credit system has a cost along the way with profit to be made at specific points.  So far the card holder has been led to believe not only is it FREE for them but they will actually make money by using their card.  Those days are coming to an end.  You'll have to pay to play or use cash.  That's life. 

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trumpet-205
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Registered: ‎11-11-2010
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Re: Merchants may be allowed to charge extra for credit cards

[ Edited ]

Watchmann wrote:

Get over it folks.  Many people have fallen for 'free lunch' concept of life when it doesn't exist.  The entire credit system has a cost along the way with profit to be made at specific points.  So far the card holder has been led to believe not only is it FREE for them but they will actually make money by using their card.  Those days are coming to an end.  You'll have to pay to play or use cash.  That's life. 


I already talked about it but,

 

Swipe fee is already included in existing price. When a product is being priced, seller will factor in swipe fee. So why in the world would these merchants demand charging additional surcharge?

 

If anything, these merchants should lower existing price when cash and/or check is used for payment AS OPPOSED to the use of plastic. It makes no sense to charge surcharge on top of a price that already takes care of swipe fee. This entire lawsuit is not about recouping swipe fee, but an excuse to earn additional revenue.

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Dadaluma83
Posts: 364
Registered: ‎08-23-2011
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Re: Merchants may be allowed to charge extra for credit cards

Yeah nothing was stopping the merchants from offering cash discounts (IE Rewarding people who choose a cheaper method of payment)

 

Instead they fought to charge credit card customers extra (Thus punishing people who use a credit card as opposed to rewarding cash paying customers)

 

 

The merchants are just as greedy as the banks. They don't want to advertise the higher credit price, then offer a cash discount. Instead they want to advertise the lower cash price, then slap on a gotcha at checkout if someone decides to pay with a credit card.

 

Really lousy situation and I am not just saying that as someone that loves their credit card rewards. Although I don't do so much online shopping like ebay or amazon. Most of my shopping is brick and mortar I do a bit of traveling however and a credit card is hugely useful for booking flights and hotels.

 

So because of this stupid ruling did my airfare and room rates automatically just go up 3% (on top of the price before which already had the swipe fees built in) really lousy situation when you have to pay a surcharge on prices that already add up to several hundreds of dollars.

 

You can use a debit card yes, but hotels will place a hold on your available funds and you don't always know how much it is so you risk overdraft fees. Pay by credit card and you pay a surcharge, assuming the hotel will tack on the surcharge and judging by hotels in other countries where surcharges are allowed they will do it.

 

Pick your poison. Pay debit and risk overdraft fees, pay credit and pay a surcharge.

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marty56
Posts: 5,672
Registered: ‎10-06-2007
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Re: Merchants may be allowed to charge extra for credit cards


Dadaluma83 wrote:

You can use a debit card yes, but hotels will place a hold on your available funds and you don't always know how much it is so you risk overdraft fees.


Add gas stations to the list.  Even when I use my CC, I still see a pending $1 authorization on my account.

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lithium78
Posts: 930
Registered: ‎07-30-2011
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Re: Merchants may be allowed to charge extra for credit cards

To this point, credit card companies have made money by charging swipe fees to merchants and interest fees to consumers.  They have also offered some fraud protection, warranty extensions, and rental car insurance as part of the card agreement with consumers.  Consumers with rewards cards have been given a small rebate from part of the swipe fees merchants have been charged as their fee for being able to accept the convenience of credit cards.  Merchants who accepted credit cards had the convenience of not having to handle actual cash, which could be stolen from them by employees and outside thieves.  Merchants increased their prices to account for the swipe fees and everybody should have been happy.

 

Now, merchants have gotten extra greedy.  They will keep the prices at their current level, but also pass on the swipe fees to the consumers.  In essence, they are keeping the benefits of being able to process transactions electronically, but they aren't taking on any of the financial responsibility.  Anybody who thinks prices will be reduced due to this policy are fools.

 

Here's what is going to happen from this change:  Big box retailers will keep things exactly as they are, because they don't want to alienate customers.  Smaller retailers will start charging extra for credit cards and they will lose consumers' business to the larger retailers.  Lots of small businesses will go out of business and our economy will be increasingly concentrated in larger and larger businesses, while the middle class shrinks even more.

 

I'm pissed off about this because I care about my own financial self-interest.  It's not in my interest to hand over more of my hard-earned money to greedy merchants.


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cassembler
Posts: 470
Registered: ‎02-07-2011
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Re: Merchants may be allowed to charge extra for credit cards

It's been settled. Merchants can now charge credit card surcharges.

 

http://online.wsj.com/article/SB10001424052702303919504577525284273006706.html?mod=WSJ_hpp_LEFTTopSt...

 

"Credit is purely a cash flow tool. Thinking of credit as extra money you didn't have before makes it an EXPENSIVE cash flow tool."
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pipeguy
Posts: 797
Registered: ‎10-31-2011
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Re: Merchants may be allowed to charge extra for credit cards

[ Edited ]

lithium78 wrote:

To this point, credit card companies have made money by charging swipe fees to merchants and interest fees to consumers.  They have also offered some fraud protection, warranty extensions, and rental car insurance as part of the card agreement with consumers.  Consumers with rewards cards have been given a small rebate from part of the swipe fees merchants have been charged as their fee for being able to accept the convenience of credit cards.  Merchants who accepted credit cards had the convenience of not having to handle actual cash, which could be stolen from them by employees and outside thieves.  Merchants increased their prices to account for the swipe fees and everybody should have been happy.

 

Now, merchants have gotten extra greedy.  They will keep the prices at their current level, but also pass on the swipe fees to the consumers.  In essence, they are keeping the benefits of being able to process transactions electronically, but they aren't taking on any of the financial responsibility.  Anybody who thinks prices will be reduced due to this policy are fools.

 

Here's what is going to happen from this change:  Big box retailers will keep things exactly as they are, because they don't want to alienate customers.  Smaller retailers will start charging extra for credit cards and they will lose consumers' business to the larger retailers.  Lots of small businesses will go out of business and our economy will be increasingly concentrated in larger and larger businesses, while the middle class shrinks even more.

 

I'm pissed off about this because I care about my own financial self-interest.  It's not in my interest to hand over more of my hard-earned money to greedy merchants.


With no disrespect meant towards the poster, I don't believe you have any idea of the costs of running a small business. Swipe fees are way way over priced for what they give in return. Rather than argue the post, I'd suggest you look up the corporate SEC financials for MC/V/AE/Disc and look at how much those companies make from swipe fees. By "make" I mean profit over costs of all the so called benefits. AE and Discover are 100% self contained, MC/V add a layer on top of bank issuers (network costs).

 

Swipe fees are one of the greatest costs to merchants, more than rent, less than wages, but still a major cost factor for the small merchant. We heard all this "BS" with the debt card swipe fee issue, once capped the world didn't end and prices have not increased.

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cassembler
Posts: 470
Registered: ‎02-07-2011
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Re: Merchants may be allowed to charge extra for credit cards

[ Edited ]

My $0.02:

 

The majority of major retailers (esp. grocers: Wal Mart, etc) will set the tone of the policy, and smaller retailers will follow suit. I fully expect a flat 2 or 3% surcharge on all credit card purchases, and there will be some complications around debit vs. credit.

 

In the mid-term, CC usage will flatten out, and debit card/ATM usage will tick up (along with the associated fees and complications). Credit Card issuers won't have much incentive to reduce fees, because merchants connot charge different fees for a given card type. Small businesses slowly become a touch healthier, which is a good thing.

 

However, the end result for consumers is our sales tax rate has effectively increased by 1-3%. Not a happy day for the consumer.

 

$0.02 I hope I'm wrong :smileyhappy:

"Credit is purely a cash flow tool. Thinking of credit as extra money you didn't have before makes it an EXPENSIVE cash flow tool."
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lithium78
Posts: 930
Registered: ‎07-30-2011
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Re: Merchants may be allowed to charge extra for credit cards

I'll probably restrict my purchases to internet retailers from now on, then.  I seriously doubt they will introduce surcharges, because their entire business model is based on credit cards.


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