topic Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live) in SmorgasBoard

(IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

Wavester64 — Tue, 22 Feb 2022 20:36:29 GMT

Here's my reasoning (at least where I live).

More and more food establishments by me are all charging 3%-3.99% for using a credit card.

Instead of putting it that you are being charged extra for a CC, they sugar coat it that
you are getting charged less (or a discount) for using cash, which is not really the case. Now when you bring this up in discussion say in another forum outside of MF, or even your local Facebook town posts, the simple answer is "Don't go there anymore" or maybe "just use cash!". Both responses are all fine and good but how does that help those of us in the CC game? And what about the "Don't go there anymore" response.
What if its your favorite pizza place, or your favorite bagel place and they do it? So then you resort to going to your 2nd or 3rd favorite place, and they start doing it? You get my point. And it's not just the Mom & Pop places, its Diners, and restaurants, etc. I am surprised the CC companyies are not addressing this. I know we are recovering from a pandemic, but is it right to be charged more because you are using a CC? Wasn't it the ability to use a CC @ an establishment the lure to go there at one point, now its something being used to push you away?

I mean, I used to work in the food industry and no, I did not take CCs. However, if I did, I cannot see myself charging more to my customers using credit. And I know they would definitely walk out on me if I did, no matter how much they liked my food.

What are your thoughts? Do establishements by you charge more for using a CC? Would you keep going there if they did?

I don't mind the place that says if you don't spend $xx, then we will charge a $0.50 fee, that I can understand & live with.

But to pay 3.99% (which is more the going rate by me than 3%) for using a CC just doesn't seem right.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

FireMedic1 — Tue, 22 Feb 2022 23:24:38 GMT

The laws regarding surcharges may vary from state to state, and each credit card network has its own rules as well. The law states that restaurants and cafes can charge credit card surcharges as long as they clearly notify and inform their customers. But in some states there is a complete ban on credit card surcharges.

Here in Florida they had a law prohibiting credit card surcharges, but that law was held unconstitutional by federal courts. Might be in fine print at the bottom of the menu.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

K-in-Boston — Tue, 22 Feb 2022 23:51:44 GMT

Unfortunately laws did recently change on this. It used to be prohibited in many merchant agreements. Most retailers I see doing this are charging much more than the actual rates they would pay for card processing, and I have seen some gas stations charging as much as 40¢ more per gallon, which where I am and since my car requires 93 octane, works out to about a 10% surcharge (and around 12-13% for regular unleaded) and I only use "cash/credit same price" stations.

Most retailers doing this are solely doing themselves a disservice. Study after study has shown that credit card customers spend far more on an average transaction at retailers than cash customers (Amex cardholders to an even greater extent). I will generally not frequent cash only establishments (I never carry cash anyway) and definitely won't pay markups like that if I can avoid it.

As for card issuers, offering the incentive on categories like dining is easily paid for by 1x/1% spending and interest from the many consumers that do not pay their balances in full each month.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

wasCB14 — Tue, 22 Feb 2022 23:55:08 GMT

Good food comes first.

My town has a lot of restaurants per capita, but many of them have mediocre food. If a good place wants me to pay cash, not use an Amex, or pay a fee if the purchase is under $X, I'll obey.

4% fee to pay by Amex? With Gold and Business Platinum I earn 6%+ on Delta redemptions. It beats cash.

That said, in 2020 a few once cash-only places started taking CC to improve distancing (no need to give change to a cash customer) and attract delivery orders.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

Spotsy — Wed, 23 Feb 2022 00:40:00 GMT

A business that 'adds' a surcharge to the customer's bill is doing it to spite the CC issuers and processing networks, but in actuality ends up hurting themselves.

A business should adjust and adopt with the times, especially if they want to grow and retain customers. The most successful model to encourage a customer to use cash is to increase the overall published selling price of their goods and services to cover the cost of CC processing, but also offer a cash discount...plain and simple. Most customers will respond better to a 'discount' rather than 'I need to charge you more'....never a good approach.

Back when CCs were newer and not as common, 20+ years ago, this approach would have been more difficult. Today's consumer is more savvy, understands cash discount models, and can decide for themselves. I will pay cash, if I have it, to local small business and 'mom and pop' type establishments...but will definitely use a CC where there is no discount for using cash, or it's a larger national chain.

As a previous poster said, consumers that use CCs spend more, and are willing to pay a higher price, with the knowledge that the offset is convenience and some other CC rewards payback.

my 3 cents...

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

Anonymous — Wed, 23 Feb 2022 01:20:37 GMT

@K-in-Boston wrote:

Most retailers doing this are solely doing themselves a disservice. Study after study has shown that credit card customers spend far more on an average transaction at retailers than cash customers

This may be true for many retailers, but I can certainly see that some low/mid range dining places may not have this issue. Then it is a question of whether too many customers don't come (because they don't have cash on them) and those put off because of a surcharge, vs the money saved in transaction fees. I am always reluctant to assume that a specific merchant is making a mistake doing this, because it IS possible that they have a good read on their customer base!

(I have never been TOTALLY convinced by the studies! Certainly in the past, credit card holders were likely more affluent, and so their charges might be higher, and may well be using ccs for ease (and perhaps protections in the days those existed). If they want to spend $X on something they really want, would they pay cash if that was the alternative? For those using ccs and carrying a balance, I guess it makes sense, but the issuers are the big winners there!)

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

Aim_High — Wed, 23 Feb 2022 02:32:43 GMT

I travel domestically quite often, @Wavester64, and I dine out on those trips. It's still very rare in my experience to run into credit card surcharges. It's actually more common to run into special taxes and surcharges put into place by cities than a merchant-driven credit card surcharge. What area do you live or are you seeing this?

I have one local restaurant that we used to go to regularly that started card surcharges. I complained, paid in cash, and haven't been back in over two years. The server said the manager did that and was getting a lot of complaints. The problem is, customers like myself who leave won't be around to see a rollback of the policy if they change their mind. I'm gone for good. It's a penny-wise and pound-foolish decision, IMO. People like paying with cards at restaurants. If the restaurant needs to cover their processing costs, an easier way is just to jack up the prices by $1 and most people won't notice. But I won't be singled out for using my credit card.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

notmyrealname23 — Wed, 23 Feb 2022 02:33:32 GMT

LOL, it's the opposite where I live, plenty of places won't take cash. Food trucks, mom and pop dining places. I go for WEEKS without using or having cash in my wallet. Not many places around here with cash premiums (there's literally one private club I go to, but that about it).

Your cashier can't steal from the till if you're card-only.

You can't be held up for what's in the till if you're card-only.

You don't have to store cash and make bank runs if you're card-only.

You don't have to worry about breaking bills or pocket change if you're card only (and that's been a thing in the pandemic).

I get that there are costs for processing cards and to each their own, but the trends are going the other way from "cash-only".

https://blog.fidelitypayment.com/cash-use-decline/

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

NoMoreE46 — Wed, 23 Feb 2022 05:23:19 GMT

@notmyrealname23 wrote:
LOL, it's the opposite where I live, plenty of places won't take cash. Food trucks, mom and pop dining places. I go for WEEKS without using or having cash in my wallet. Not many places around here with cash premiums (there's literally one private club I go to, but that about it).

Your cashier can't steal from the till if you're card-only.

You can't be held up for what's in the till if you're card-only.

You don't have to store cash and make bank runs if you're card-only.

You don't have to worry about breaking bills or pocket change if you're card only (and that's been a thing in the pandemic).

I get that there are costs for processing cards and to each their own, but the trends are going the other way from "cash-only".

https://blog.fidelitypayment.com/cash-use-decline/

^^^

Yup. Was thinking the same thing @notmyrealname23 about the other 'costs' of cash...

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

NRB525 — Wed, 23 Feb 2022 07:31:25 GMT

Cash is gross.
I stopped at a gas station as I needed some dental floss. I get bacon gristle between two of my back teeth and have to get it out or I worry it all day. So the floss says like $3 and the lady says "do you have cash? $5 minimum for credit card." I had no cash. So I bought a carrot cake pastry to share with my wife. And used my AMEX Platinum card. Solved several issues, as we only got coffee at Starbucks, with breakfast sandwiches that included bacon gristle on mine, but no pastry.

More places around here flat do not accept any cash because of the pandemic issues with cleaning.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

Aim_High — Fri, 25 Feb 2022 18:22:52 GMT

@NRB525 wrote:
Cash is gross.
I stopped at a gas station as I needed some dental floss. I get bacon gristle between two of my back teeth and have to get it out or I worry it all day.

CASH is gross? Lol ...

@NRB525 wrote:
More places around here flat do not accept any cash because of the pandemic issues with cleaning.

Hmmmm ... sounds like there needs to be more .... money laundering. Lol

Yes, on a serious note, I know what you mean. I've wondered if the pandemic has accelerated the move towards electronic payment methods. It used to be rare to see "card only" but now it's fairly common.

Re: (IMO) 3%/5% CB for Dining will soon be Dead (at least where I live)

Citylights18 — Tue, 15 Mar 2022 04:31:19 GMT

Construction contractors can give a cash discount, certified cash directly from the bank. I've had some give me a 5% discount by doing it this way.

Restaurants get you on their charges for things like sodas and coffee. I had a 16 dollar sandwich today at a team lunch and ended up putting down $25 when soda, taxes and tip were factored into the bill.