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Merchants Adding 4% Charge to their CC Customers

Wavester64
Valued Contributor

Merchants Adding 4% Charge to their CC Customers

Around my town and State, many merchants are adopting the policy of adding 4% to the charge of their items (be it food, services, etc.) that the CC paying customer has to absorb because per the merchant, that is the cost they are charged for providing the convenience of using CCs to their customers and they are trying to get that back to sustain business.

 

Now because of the times we are in, one could argue that this is necessary so that the businesses being hurt have a chance to thrive.

 

Another argument could be that we the customers have been hit hard due to the pandemic as well, and we are trying to save as much money as we can to get by.

 

When I post something like this on Facebook in one of my local town groups, most of the replies are all PRO the merchant, that if we the customer don't like it, TOO BAD, PAY CASH & save money. One needs to keep in mind that most of these who reply like this are not into the CC game like we MF'ers are on this forum.

 

Now I'll ask it here since we are in the CC game to save money. Do you feel its right that merchants add a 4% charge to your total? If you feel its OK, would you feel the same way if there was no COVID?

 

I mean, yeah, I feel for the businesses, I was a business owner for MANY years and had my struggling times. But as a consumer/customer, where does it end? I mean we as consumers are getting these CCs, or looking for coupons, or buying Groupons to save money, just for the merchants to charge more anyway?

 

You see what I mean? Curious to see your take on this.

 

I mean this topic for all - but going to add a few buddies below to get their attention and hear their thoughts on this subject too. Smiley Happy

 

@Gmood1 @Birdman7 @Shootingfor800 @M_Smart007 @coldfusion @Saeren @JNA1 @cashorcharge @AllZero @corpcrmgr 







Potential Future Cards
Message 1 of 46
45 REPLIES 45
Brian_Earl_Spilner
Community Leader
Mega Contributor

Re: Merchants Adding 4% Charge to their CC Customers

Last I checked it was against the credit card agreement to charge a surcharge to offset the fee. There's a specific law for gas stations to be able to charge more for taking a card, but I don't remember what it is.

 

As for the fee itself, I really don't care about 4%. My problem is people become used to it and it doesn't go away. Prices and fees always go up and are added, but never lowered and removed. It just becomes a way of life.




Message 2 of 46
Birdman7
Super Contributor

Re: Merchants Adding 4% Charge to their CC Customers


@Wavester64 wrote:

Around my town and State, many merchants are adopting the policy of adding 4% to the charge of their items (be it food, services, etc.) that the CC paying customer has to absorb because per the merchant, that is the cost they are charged for providing the convenience of using CCs to their customers and they are trying to get that back to sustain business.

 

Now because of the times we are in, one could argue that this is necessary so that the businesses being hurt have a chance to thrive.

 

Another argument could be that we the customers have been hit hard due to the pandemic as well, and we are trying to save as much money as we can to get by.

 

When I post something like this on Facebook in one of my local town groups, most of the replies are all PRO the merchant, that if we the customer don't like it, TOO BAD, PAY CASH & save money. One needs to keep in mind that most of these who reply like this are not into the CC game like we MF'ers are on this forum.

 

Now I'll ask it here since we are in the CC game to save money. Do you feel its right that merchants add a 4% charge to your total? If you feel its OK, would you feel the same way if there was no COVID?

 

I mean, yeah, I feel for the businesses, I was a business owner for MANY years and had my struggling times. But as a consumer/customer, where does it end? I mean we as consumers are getting these CCs, or looking for coupons, or buying Groupons to save money, just for the merchants to charge more anyway?

 

You see what I mean? Curious to see your take on this.

 

I mean this topic for all - but going to add a few buddies below to get their attention and hear their thoughts on this subject too. Smiley Happy

 

@Gmood1 @Birdman7 @Shootingfor800 @M_Smart007 @coldfusion @Saeren @JNA1 @cashorcharge @AllZero @corpcrmgr 


Thanks for the page @Wavester64 !

 

funny you should ask, I have friends who have local small businesses and I had to twist their arms to get them to add the 4% surcharge to help offset their costs.

you know it's a situation that I wouldn't pay the 4% surcharge. I would pay cash, but for the business owner, they are recouping their cost and maybe a little bit for the trouble. Because the inter-exchange fees run anywhere from ~2% to 3%+.

so how do I feel about it? Well if I'm the consumer, I don't like it and would pay cash. For the business owner, they are just recouping their cost and it's up to you whether to pay cash or credit, either way is the same to them. 

-Scoring wisdom: General Scoring Primer, Payment History, Amount of Debt, Length of History/New Credit, Mix/Disputes/Freezes/Searches, Mortgage Scores/Negative Reason Codes/V.9, Helpful Links,
CassieCard’s Reason Statements Thread,
iv's friendly statement to reason statement concordance,

ccquest’s Workbook to calculate metrics.
Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.




(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 3 of 46
Dumbee
Established Contributor

Re: Merchants Adding 4% Charge to their CC Customers

Yeah... merchants aren't supposed to do this and can be penalized by the card networks/payment processors

 

It's not likely that they dropped their prices by 4% and then added the 4% CC fee to match; they probably just want to grab more money and tacked on the additional fee on top of the same price that already included their CC txn fees


Smiley Embarassed
Personal/40.15K Biz/23K POT/17K
Message 4 of 46
cashorcharge
Valued Contributor

Re: Merchants Adding 4% Charge to their CC Customers

I have never seen or been asked to pay a fee for using a credit card.  It's interesting that I see a lot of advertisements for processors and even within my own organization, 4% seems HIGH considering I typically see 2 or 2.5% fees.  I will add that I DO see a lot more of  "We've gone Cashless" as a result of COVID and you're forced to use a card...and even then, those businesses aren't charging a fee on top of their pricing.  I would likely not blink if my $4.00 fancy coffee was increased by $0.18 (4%) but then it would be less noticeable if the retailer just raised the price versus calling me out saying they're going to charge me more because I'm pulling out a card.  

 

I should also add the guy that cuts my hair no longer takes credit cards...he's switched to Cash or Venmo or Apple Pay...but I tend to think that's more about skirting taxes than giving more money away for a credit card considering I've been paying him that way for years.

 

I am one of those people that doesn't really carry cash (CashorCharge irony right) because I hate dealing with change so I use a card for everything and then pay that.  I tend to work the bonuses and % back where I can or extra points at specific places and I've been that way for a long time.  It's more about convenience.  If the ApplePay Wallet would allow more than 12 cards in the app, I would be REALLY happy!  

 

I get people are struggling, I try to focus my spend on small business when I can, do what's right and help where it's possible.  I don't know that I would stop going somewhere that passes the fee on...I would just be getting my 2% back on a greater purchase depending on what card I use.  Over time it would certainly add up.  I may have a different perspective if I saw it more.  Fortunately, I haven't seen it yet.

 

Thanks for sharing!

Message 5 of 46
coldfusion
Community Leader
Super Contributor

Re: Merchants Adding 4% Charge to their CC Customers

 

https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140d/Section28a

 

 



(4/2021)
FICO 8 (EX) 815 (TU) 822 (EQ) 808
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Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion
Message 6 of 46
Brian_Earl_Spilner
Community Leader
Mega Contributor

Re: Merchants Adding 4% Charge to their CC Customers


@coldfusion wrote:

 

https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140d/Section28a

 

 


There's one version. Maybe that's what the deal was with gas, they're not charging more for card, they're giving a discount for paying cash.




Message 7 of 46
coldfusion
Community Leader
Super Contributor

Re: Merchants Adding 4% Charge to their CC Customers


@Brian_Earl_Spilner wrote:

@coldfusion wrote:

 

https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140d/Section28a

 

 


There's one version. Maybe that's what the deal was with gas, they're not charging more for card, they're giving a discount for paying cash.


Yep.



(4/2021)
FICO 8 (EX) 815 (TU) 822 (EQ) 808
FICO 9 (EX) 827 (TU) 826 (EQ) 832

$1M+ club

Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion
Message 8 of 46
DaveInAZ
Senior Contributor

Re: Merchants Adding 4% Charge to their CC Customers


@Birdman7 wrote:

so how do I feel about it? Well if I'm the consumer, I don't like it and would pay cash. For the business owner, they are just recouping their cost and it's up to you whether to pay cash or credit, either way is the same to them. 


If I'm the consumer I don't like it but would NOT pay cash, I'd just take my business elsewhere. I think any surcharge on using a CC is pure B.S.. Every business has a bunch of expenses, and CC commissions are a fraction of many of their other expenses - rent/mortgage, labor, utilities, etc. Are you going to advertise a new battery for my car for $100 and then when I come on to buy it are you going to add a 25% surcharge for your rent, 20% for labor, 15% for electricity, and then 4% for my CC??? If they did they wouldn't stay in business very long.

 

And while they're absorbing an expense of 2.5-3% for a CC they're saving time of having to go to a bank for a deposit/change order, and avoiding the risk of having a large amount of cash on hand. And in the middle of a pandemic not having to handle cash avoids a risk of spreading the Covid virus. Most fast food places in my area are placing the CC terminal in the window so you can insert your card yourself, if you pay with cash they hand you a plastic tray to place you cash in and hand your cash back in the tray, and they wear gloves.

 

Credit card commissions are a cost of doing business, get over it and price your goods appropriately to cover all your expenses and still make a fair profit.

Message 9 of 46
Birdman7
Super Contributor

Re: Merchants Adding 4% Charge to their CC Customers

It’s not illegal and there’s a difference between a surcharge and a convenience fee. I’ll look it up and post the link but if I remember correctly your convenience fee can only be charged by the government or a school, payment channel, something like that, but a surcharge can be done legally.

-Scoring wisdom: General Scoring Primer, Payment History, Amount of Debt, Length of History/New Credit, Mix/Disputes/Freezes/Searches, Mortgage Scores/Negative Reason Codes/V.9, Helpful Links,
CassieCard’s Reason Statements Thread,
iv's friendly statement to reason statement concordance,

ccquest’s Workbook to calculate metrics.
Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.




(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 10 of 46
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