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Credit card surcharges grow more common

Super Contributor

Credit card surcharges grow more common

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


FICO8 EQ 760 TU 795 EX 764 Total revolving limits 661200 (551200 reporting)
Message 1 of 7
6 REPLIES
Super Contributor

Re: Credit card surcharges grow more common

SouthJamaica thanks for the information It was a good read! Smiley Surprised

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Message 2 of 7
Established Contributor

Re: Credit card surcharges grow more common

"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.

 

 

EQ8:843 TU8:840 EX8:850 EQ9:850 TU9:850 EX9:850 EQ5:774 TU4:791 EX2:809 - 2018-11-07
Message 3 of 7
Super Contributor

Re: Credit card surcharges grow more common


@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.

 

 


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.


FICO8 EQ 760 TU 795 EX 764 Total revolving limits 661200 (551200 reporting)
Message 4 of 7
Established Contributor

Re: Credit card surcharges grow more common

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.
Message 5 of 7
Super Contributor

Re: Credit card surcharges grow more common


@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 Smiley Happy

 

Credit card rewards aren't everything Smiley Happy


FICO8 EQ 760 TU 795 EX 764 Total revolving limits 661200 (551200 reporting)
Message 6 of 7
Regular Contributor

Re: Credit card surcharges grow more common

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.

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