Charges for using credit cards?

[TheMalcolmConnection]

Just started noticing this around town, a TON of small businesses here are now charging 5% to USE a credit card. Many of the gas stations also don't tell you, but the price increases after you put your card in. Is this something I'm just now noticing?

I rarely have cash and I understand that it costs the businesses money to have a machine, but sometimes you just have to get with modern times.

[dmek25]

does that include debit cards? and good morning to you

[TheMalcolmConnection]

GOOD MORNING. LOL, been a while on that.

And yes, it includes debit cards...

[Chico23231]

Originally Posted by TheMalcolmConnection

Just started noticing this around town, a TON of small businesses here are now charging 5% to USE a credit card. Many of the gas stations also don't tell you, but the price increases after you put your card in. Is this something I'm just now noticing?

I rarely have cash and I understand that it costs the businesses money to have a machine, but sometimes you just have to get with modern times.

Its a combo. Its mostly the charge of Visa and Mastercard and then the lesser merchant services of a bank imposing fees to process electronic transactions. Most people assume the processing of trillions of electronic purchases should be as free as universal health care. The business is forced then to pass the rising cost to the customer. Remember all the legislation against credit card companies in the pass year? this is likely affect, remember just because laws changes companies' bottomlines do not.

[TheMalcolmConnection]

Originally Posted by Chico23231

Its a combo. Its mostly the charge of Visa and Mastercard and then the lesser merchant services of a bank imposing fees to process electronic transactions. Most people assume the processing of trillions of electronic purchases should be as free as universal health care. The business is forced then to pass the rising cost to the customer. Remember all the legislation against credit card companies in the pass year? this is likely affect, remember just because laws changes companies' bottomlines do not.

See, I've been wondering about this kind of information. Many of the businesses also have these giant signs up saying, "CREDIT CARD COMPANIES ARE KILLING US!"

It's just a little off-putting and I understand they have costs, but maybe I'd rather see it in the price where it's something that's just hidden, rather than right in my face. :P

[Chico23231]

Originally Posted by TheMalcolmConnection

See, I've been wondering about this kind of information. Many of the businesses also have these giant signs up saying, "CREDIT CARD COMPANIES ARE KILLING US!"

It's just a little off-putting and I understand they have costs, but maybe I'd rather see it in the price where it's something that's just hidden, rather than right in my face. :P

i agree. I think 5% is excessive, mostly mom and pop shops are the people charging it. Its just so damn hard to carry cash these days.

[firstdown]

Originally Posted by TheMalcolmConnection

See, I've been wondering about this kind of information. Many of the businesses also have these giant signs up saying, "CREDIT CARD COMPANIES ARE KILLING US!"

It's just a little off-putting and I understand they have costs, but maybe I'd rather see it in the price where it's something that's just hidden, rather than right in my face. :P

If I pay cash why should I have to pay for the cost of people who use a credit card?

This is a direct result of all that legislation passed to reform credit card companies and banks. Enjoy. Wait until you buy a new house and everthing that is associated with your closing has also gone up because of those same laws.

[firstdown]

Originally Posted by Chico23231

i agree. I think 5% is excessive, mostly mom and pop shops are the people charging it. Its just so damn hard to carry cash these days.

I have no problem carrying cash so please send me any money you have trouble carrying. I'm guess the 5% they are charging is on a small purchase and not a larg one.

[TheMalcolmConnection]

But I think over the years that the number of people who pay with a credit card has gone up exponentially. In the end, I kind of think that it's the responsibility of the store to take care of the charges if they want repeat customers. There are places we don't eat at here specifically because they don't take credit cards.

Call it laziness or call it whatever you like, but I don't want to have to run to the ATM to take out twenty bucks to pay for my dinner.

It's not an issue of not liking to carry money, it's just an electronic age where my check is automatically deposited, my bills are automatically paid and my bank sends checks to anyone else who doesn't take cards.

[TheMalcolmConnection]

Originally Posted by Chico23231

i agree. I think 5% is excessive, mostly mom and pop shops are the people charging it. Its just so damn hard to carry cash these days.

Absolutely. I needed a new cable for my bass and I do like to support local business, so I went to the music store, and sure, I don't mind paying a few extra bucks to do that. But now with these 5% fees, they are REALLY not making it easy to support them. I can get it online for a quarter of the price...

[Monkeydad]

Speaking from the accounting/bookkeeping side of the issue...merchant services fees are becoming ridiculous. For a small business, it's tempting to forget the high monthly fees and just not accept cards, but a business can not survive like that any more. It's expected that you take plastic. I have seen smaller transactions where as much as a quarter of the funds taken in are immediately gone for merchant fees, it all depends on the fee structure in the business' contract. Credit Card Merchant fees are beginning to place a burden on smaller businesses and nonprofits who want to accept credit cards.

Plus on top of the c/c merchant fees, if the business wants to accept American Express, they're forced to sign an additional merchant services contract with AMEX Merchant Services, as they are seperate from VISA/MasterCard/Discover and make you pay extra on top of your other merchant fees. This is why many businesses do not accept AMEX...they can't afford to.

So, as for this fee, it's going to be a choice between raising their prices on EVERYONE, or just add on a share of the merchant fee to those using that service. Honestly, I prefer the fee for C/C users, instead of being penalized when not even using a card and paying cash.

[firstdown]

I allways have $100 to $300 in my wallet or stashed away at home. I may only go to the bank once a month but when I'm there I cash a check so I always have cash. My friend who owns a tackle shop said if someone spends under $10 in their store and uses a charge card they don't really make any money off the transaction. That's been years back sense he told me that and I'm not sure how much that has changed over the years.

[Monkeydad]

Originally Posted by firstdown

My friend who owns a tackle shop said if someone spends under $10 in their store and uses a charge card they don't really make any money off the transaction.

That's what I was just saying about the smaller transactions. I know some convenience stores around here won't accept a card if the transaction is under $5.00 for that very reason....after fees, they'd be literally giving their products away for nothing.

[firstdown]

Originally Posted by Monkeydad

That's what I was just saying about the smaller transactions. I know some convenience stores around here won't accept a card if the transaction is under $5.00 for that very reason....after fees, they'd be literally giving their products away for nothing.

I saw your post right after I posted mine. She required a $10 purchase if using a credit card but that's not legal or maybe it was against the contract with the merchant. Can't remember.

[saden1]

The system use to be simple until Visa and MastarCard cornered the market and started demanding more and more percentage/fees from merchants. Of course, merchants like Wal-Mart and Safeway have negotiations power unlike the mom and pop shop so they get a more favorable deal. Small merchants no longer have a choice but to pass on the cost unless they want to give 2% to 3% of the cost of goods to Visa/MasterCard.

A legislation was put forth to limit Swipe Fees and passed last year but it is only for debit card fees (gee, I wonder why?).

Retailers score in swipe fee fight with credit card giants - Jun. 23, 2010

p.s. Visa and MasterCard are ripe to be supplanted by something like Google Wallet through Paypal or Google checkout. I hope it takes off.