Credit card surcharges grow more common

[SouthJamaica]

https://www.creditcards.com/credit-card-news/credit-card-surcharge-confusion.php

[Anonymous]

SouthJamaica thanks for the information It was a good read!

[iv]

"Numbers are hard to come by, but it seems clear that surcharges are more likely to pop up at independent merchants.

Big retail chains are mostly avoiding surcharges, according to the National Retail Federation."

...in other words, the big chains have already priced the costs of card processing into the base price - and you'll be paying it regardless of payment method.

[SouthJamaica]

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@iv wrote:

"Numbers are hard to come by, but it seems clear that surcharges are more likely to pop up at independent merchants.

Big retail chains are mostly avoiding surcharges, according to the National Retail Federation."

...in other words, the big chains have already priced the costs of card processing into the base price - and you'll be paying it regardless of payment method.

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What prompted me to post the article is that I myself have noticed that some of the small independent places that I go to have started to charge extra for credit card purchases. 

I'm not a great businessman, but to me it seems like a bad idea, because it gives people who like to use credit cards for purchases an incentive to go elsewhere.  It certainly renders my credit card rewards useless in those establishments.

[xaximus]

Most often - I see an additional charge at either mom-and-pop type stores and gas stations (non-branded usually). I almost never shop at those places either as their credit card security is lax at best and have heard horror stories of cards being taking a picture of or copied or something along those lines.

[SouthJamaica]

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@xaximus wrote:
Most often - I see an additional charge at either mom-and-pop type stores and gas stations (non-branded usually). I almost never shop at those places either as their credit card security is lax at best and have heard horror stories of cards being taking a picture of or copied or something along those lines.

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Me, I always try to shop, and eat, at mom-and-pop type places

Credit card rewards aren't everything

[Anonymous]

In regards to a post earlier mentioning it being bad business practice to charge the fee to the consumer... I think the real difference is disclosing the fee being charged to the consumer, not just blanketing it in the product price.

I would venture a guess that most major companies automatically include that "surcharge" in most, if not all, of their product prices by default.

Such as, going to that mom-and-pop shop, and the item is $11. They charge an extra $2 to use a card. Yes, that can be hefty in terms of percentage of the original cost.

But, say larger companies are going to assume their business is too large to "police" credit card versus cash transactions... so maybe Walmart is automatically adding 5% to all of their sales prices to compensate for the largest anticipated swipe fees (AmEx, for example).

In that example, they are likely keeping that in their pocket as a profit from Visa/MC cardholders, but nonetheless they are still protecting themselves in the same way as the mom-and-pop locations, just not as "up-front" about the tactic. Mom-and-pop places are likely rewarding people who pay cash with the lower prices, and charging the swipers something as the fee would cut into their initially planned margins.

In the above examples, I just used Walmart/AmEx as the examples, but this was just for keeping the example somewhat simple.

Just a largely theoretical guess, but something to ponder.

[Anonymous]

Without numbers, I'm not sure we can conclude that they've gotten more common over X period of time. For instance, outside of gas stations, surcharging is still pretty uncommon where I live (but I live in California, so that might be related).

That said, if there are further increases in interchange or if the remaining no-surcharge laws do get struck down, I wouldn't be surprised if they become the norm and not the somewhat-exception that they are now.

[DaveInAZ]

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@iv wrote:

"Numbers are hard to come by, but it seems clear that surcharges are more likely to pop up at independent merchants.

Big retail chains are mostly avoiding surcharges, according to the National Retail Federation."

...in other words, the big chains have already priced the costs of card processing into the base price - and you'll be paying it regardless of payment method.

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True, but the big chains get negotiated lower CC processing fees due to their volume. But small independent retailers would be foolish to also not factor in CC fees into their base price. And small independent retailers should also consider the time & cost of having to go to a bank to deposit their cash receipts and get change before considering a CC surcharge. Although not common, my small town lost it's only bank a couple years ago so local merchants have to drive 20-25 miles each way to go to a bank. Our two chains, Family Dollar & Dollar General use an armoured car service, which probably costs them as much as CC fees. Some local merchant push the use of debit, which has much lower fees, by offering cash back with debit.

[DaveInAZ]

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@SouthJamaica wrote:

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@xaximus wrote:
Most often - I see an additional charge at either mom-and-pop type stores and gas stations (non-branded usually). I almost never shop at those places either as their credit card security is lax at best and have heard horror stories of cards being taking a picture of or copied or something along those lines.

---

Me, I always try to shop, and eat, at mom-and-pop type places

Credit card rewards aren't everything

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Those CC rewards add up. I avoid using cash whenever possible for CC rewards, but also because I hate dealing with coins, I usually forget about them being in my pockets and find them in the washing machine.