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http://usa.visa.com/personal/using_visa/checkout_fees/index....

"Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a surcharge on consumers when they use a credit card.

Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005."

Ten states still ban credit card surcharges by law.
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Interesting...the article lists CT as a state that does not allow surchanges...

But many if not most of the gas statons here often have 2 prices for gas posted, a 'cash price' (cheaper) and 'credit price'.

nag
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Interesting...the article lists CT as a state that does not allow surchanges...

But many if not most of the gas statons here often have 2 prices for gas posted, a 'cash price' (cheaper) and 'credit price'.

nag
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A discount for cash is not the same as a surcharge for credit.

I know it sounds kinda silly.

Jean
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Now that you say it, it is a way to get around CT law.

Wonder what the CCards Co. will do...with Cash Back and all - which is what most fools use them for.
Just hurt the people that are in a bind...?
Sorry, guess I just got my answer.

nag
who wants cash back for cruise ;-)
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Wonder what the CCards Co. will do...with Cash Back and all - which is what most fools use them for.
Just hurt the people that are in a bind...?
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I wonder what the merchants will do. We (I'm a merchant) have to pay more when we take a rewards card. We pay 3 different rates. One for preferred cards..those with no cash back or rewards. Another for mid..preferred and still another for non-preferred. The preferred are the lowest rate.

From your NBC link it looks like now not only will we be able to tell, the customer will be to. It has bothered me for a long time how people say how wonderful this or that card is when it's the merchants that are really charged for the miles or cash back. With the surcharge the customer will be the one paying.

I wonder how many people will pay the surcharge if it's 1.5 to 3% for the miles, points or cash back.

Jean
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<I wonder how many people will pay the surcharge if it's 1.5 to 3% for the miles, points or cash back.
>

Simple , we'll go to a merchant that is NOT charging a fee.
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I will try to pay cash if I know a merchant will charge the fee.

There is a small restaurant in town that gives discounts for cash. As soon as I found this out I began paying cash only. Before that, I almost always paid via credit card - just for convenience.
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>>>>I wonder how many people will pay the surcharge if it's 1.5 to 3% for the miles, points or cash back.

Jean<<<

When I see a surcharge posting I leave. If I find out about when when I try and checkout, I leave. I just stop shopping at that merchant ever. I have two stores and four gas stations on my black list. They do not want my money. I do not want their products.

I suppose we could go back to the days when everyone wrote a check, and let merchants surcharge those expenses. Or we could go back to everyone paying cash and the merchants putting a surcharge to cover the extra cost of security.
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I wonder how many people will pay the surcharge if it's 1.5 to 3% for the miles, points or cash back.

I won't pay a surcharge and I won't pay cash. There's very little in the world that is only available from one merchant. There's also no protection in a cash purchase.
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When I see a surcharge posting I leave. If I find out about when when I try and checkout, I leave. I just stop shopping at that merchant ever. I have two stores and four gas stations on my black list. They do not want my money. I do not want their products.

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Merchants weren't allowed to charge a surcharge until yesterday. They could give a discount for paying cash, but not a surcharge for CC.

You may want to look at it from the merchants point of view. For example, being a small merchant I don't have the clout of the big stores. I pay $.35 plus a percent of the sale for each charge. The percent depends on the type of card. On top of that is the monthly processing fee and the equipment fee. For small dollar sales I can end up loosing money.

I would just like people to realize it's not the CC company paying for the rewards, it's the merchants who really have no choice but to accept all the cards. They can't choose to accept regular cards and not the rewards cards.

Jean
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You may want to look at it from the merchants point of view. For example, being a small merchant I don't have the clout of the big stores. I pay $.35 plus a percent of the sale for each charge. The percent depends on the type of card. On top of that is the monthly processing fee and the equipment fee. For small dollar sales I can end up loosing money.

The store should price accordingly. The transaction fees is a known overhead expense and should be included when calculate your prices just like including store rent, employee salaries, insurance, etc.

Lara Amber
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You may want to look at it from the merchants point of view. For example, being a small merchant I don't have the clout of the big stores. I pay $.35 plus a percent of the sale for each charge. The percent depends on the type of card. On top of that is the monthly processing fee and the equipment fee. For small dollar sales I can end up loosing money.



But do you? If you make it easy for me to shop there, I'll be back. If you don't charge me a surcharge, I'll be back.

If you charge me a surcharge, there's a really good chance that I will take my business elsewhere. So I can see an argument that merchants who charge a surcharge stand to probably lose MORE money than they would on that small sale.
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The store should price accordingly. The transaction fees is a known overhead expense and should be included when calculate your prices just like including store rent, employee salaries, insurance, etc.

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How is the transaction fee known? It depends on the type of the card. It's not like I can tell how many people are going to use what type of card or if they are even going to use a card.

I do understand people's objection to paying the charge. I just think the people getting the reward should be the ones that pay for it.
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I just think the people getting the reward should be the ones that pay for it.

If you pay for a reward, it really isn't a reward.

PSU
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well, there is that.

I guess I really meant the people offering the reward should be the ones that pays for it....but they force the payment on the merchant.
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How is the transaction fee known? It depends on the type of the card. It's not like I can tell how many people are going to use what type of card or if they are even going to use a card.

There are two methods (that I've seen used) for including it in one's overhead: 1. look at the average fees last year and add that percentage in to the calculation or 2. take your highest possible percentage and plug that in. We do it every year when adjusting our price list to make sure it accurately reflects overhead.

I may not know how often our HVAC units for the hospital are going to break this fiscal year, but I sure can figure out how to include it in my overhead based on an average of previous years' expenses.

Lara Amber
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There's also no protection in a cash purchase.

Have you ever used the protection offered by a credit card?

There are purchases where delivery isn't immediate, and it is nice to have the protection though I have never needed to use it. I have had problems with credit transactions.

This doesn't mean I want to go back to using cash. We are remodeling. I don't want to need to walk into a store with a few thousand dollars. The largest payments were by check to the contractor.
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Have you ever used the protection offered by a credit card?

More than once. One notable time was when my brilliant younger son stuck the receipt in his lacrosse stick and when it broke one day past the manufacturer's warranty, we had the documentation to have the cc company pay for the replacement(he was about 14 or 15 at the time).

More recently, I had a credit card void a double-billed transaction from a taxi company.

I use one credit card for personal car rentals because it includes insurance I want.
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I guess I really meant the people offering the reward should be the ones that pays for it....but they force the payment on the merchant.


It seems like many banks are converting their customers to rewards cards whehther they want them or not. I used to have "regular" cards from two banks and both of them were "upgraded" to rewards cards even though I never asked for them. (I don't charge enough to make rewards cards really worthwhile - a few dollars a year in rewards at most.) I'm sure the banks are taking advantage of those higher fees but the customer may not have much choice whether they have a "rewards" card or not. The only bank that didn't convert me was USAA.

Karen
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More than once. One notable time was when my brilliant younger son stuck the receipt in his lacrosse stick and when it broke one day past the manufacturer's warranty, we had the documentation to have the cc company pay for the replacement(he was about 14 or 15 at the time).

More recently, I had a credit card void a double-billed transaction from a taxi company.


The first is a good example, but the second won't have occurred if a credit card hadn't been used.
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For small dollar sales I can end up loosing money.

I know this will stir up a few, but I can understand merchants setting a minimum amount for a charge or charging a service charge for small charges.
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It seems like many banks are converting their customers to rewards cards whehther they want them or not. I used to have "regular" cards from two banks and both of them were "upgraded" to rewards cards even though I never asked for them. (I don't charge enough to make rewards cards really worthwhile - a few dollars a year in rewards at most.) I'm sure the banks are taking advantage of those higher fees but the customer may not have much choice whether they have a "rewards" card or not. The only bank that didn't convert me was USAA.

Karen
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Interesting.

I wonder how much this happens. It does sound like the banks are looking for folks that won't use the rewards but the merchants are charged the fee.

The biggest thing to me is it looks like the CC company is giving the rewards, mileage, cash back when it's really the merchant.

I have no objection to paying a fee, as a merchant, for a regular card being used. It's the rewards cards and the increased fee for accepting them that I object too.

FWIW, the highest rate is for corporate cards....explain that one to me.

Jean
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>>>You may want to look at it from the merchants point of view. For example, being a small merchant I don't have the clout of the big stores. I pay $.35 plus a percent of the sale for each charge. The percent depends on the type of card. On top of that is the monthly processing fee and the equipment fee. For small dollar sales I can end up loosing money.

I would just like people to realize it's not the CC company paying for the rewards, it's the merchants who really have no choice but to accept all the cards. They can't choose to accept regular cards and not the rewards cards.<<<


But I think I do. Do you charge customers for using the restroom? That is an extra cost to you. Do you charge customers for driving in your parking lot? Wear and tear on your asphalt is an expense. Yes I get it it cost you money to take a credit card, and the amount differs based on what type of card, it also cost you money to take a check and handle cash. And even if you don't see it directly, there is are different costs associated with taking different denominations of cash. Think counterfeit risk.

My point is that I am going to get the biggest bang for my buck. If you charge me more for using a card, then you are not the biggest bang for the buck. If you are basing your business on being the lowest net cost provider to me and you charge a surcharge you just went back on your business model. If you are basing your business on customer service and product quality then more power to you. (That by the way is why my tailor is not on my black list even though he only takes cash.)

Do not know about were you live but here the merchants that do it started charging a surcharge about 6 months ago.
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The part about this that irks me is the way it was presented on the TV news as "retailers were charged a fee by credit card companies, now they can charge their own fee to re-coup those costs" - hello, retailers already factored those 2% fees into their overall price structure.

The whole point of accepting credit cards is so a customer can spend more than what's in their wallet in cash - especially since overall research is that customers paying with CC typically spend more than when they're using cash (yes - we know not everyone on the LBYM board does that - I'm talking about the average mass-consumer).
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I know this will stir up a few, but I can understand merchants setting a minimum amount for a charge or charging a service charge for small charges.

I don't know if this is still the case, but when I worked retail back in the early 90's, it was strictly prohibited by Visa/MC (by their service agreement) for a retailer to set a minimum charge amount, and for Amex it was prohibited if the retailer also accepted Visa/MC.
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I don't know if this is still the case, but when I worked retail back in the early 90's, it was strictly prohibited by Visa/MC (by their service agreement) for a retailer to set a minimum charge amount, and for Amex it was prohibited if the retailer also accepted Visa/MC.
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This is still the case.

There are some merchants that do it, but they would loose their contract if they were caught.
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(yes - we know not everyone on the LBYM board does that - I'm talking about the average mass-consumer).

This is also to some extent supporting an agenda with statistics. Large purchases are not paid for with cash.
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>>>Do not know about were you live but here the merchants that do it started charging a surcharge about 6 months ago. <<<

So far I haven't any surcharge where I live but I think you're being double dipped. For your credit card, your merchant has to pay roughly 4% of what he's passing. If the merchant has 50% cash and 50% credit cards, he increases the price for the items at that shop/restaurant. Then everybody passing through the store pays part. I have always felt that the cash users were paying part of my credit costs.

Now, a surcharge is double dipping your money.

But, starting to pay cash, you're still losing. The merchant is already putting some percentage for the bill of the purchase.

I guess that the best way is find the best merchants which will not put this surcharge from your card. Maybe only use credit cards which are not surcharged. Work with your merchant and find a way for him to help too.

When I worked for a big company, and things change, I would look at the various aspects of the changes. I would pretend that I'm sitting on a chair around a table. The changes were on the table and I could get a good look what is changing for my situation. Then I change the chair along the table and look at the changes on the table again. It has not the same, since each viewpoint is different. Going around the table I found the best chair to use and this is what I did. This is the same about the Surcharges. Then start sitting in all of the chairs.

Blackduff
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I don't know if this is still the case, but when I worked retail back in the early 90's, it was strictly prohibited by Visa/MC (by their service agreement) for a retailer to set a minimum charge amount, and for Amex it was prohibited if the retailer also accepted Visa/MC.

Merchants now have the option to charge for the swipe fees. It isn't a stretch that they could charge for small transactions, and waive the fee for larger transactions.
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For small dollar sales I can end up loosing money.

If the amount is less than twenty dollars I try to pay in cash. What is the break-even point for you on small charges?

Nancy
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The first is a good example, but the second won't have occurred if a credit card hadn't been used.

My last post on this(since you seem to respond no matter what).

Not true. I was exhausted and coming home from a transatlantic trip that was the end of one of the most stressful times in my life. I ended up taking a taxi home from the airport and ran my AMEX card. Cabbie said it didn't go through and I gave him cash. When AMEX bill came, the charge did go through. AMEX investigated and voided the charge.
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>>Now, a surcharge is double dipping your money. <<<

Bingo, Which I why I do not do business with merchants that have a surcharge.
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If the amount is less than twenty dollars I try to pay in cash. What is the break-even point for you on small charges?

Nancy
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Not sure about the break-even since our margin is different for different products. I'd like charges be larger than $10.00.

Some people here seems to think retailers have the ability to charge whatever they need to in order to cover the cost.

Market pressure often limits the price they can charge.

Small retailers are already at a disadvantage due to economies of scale...this is just another place where large retailers have the advantage to get a lower rate from the CC companies.

Jean
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I won't pay a surcharge and I won't pay cash. There's very little in the world that is only available from one merchant. There's also no protection in a cash purchase.

Except gas... In NJ, they all pretty much have the "cash discount."
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In NJ, they all pretty much have the "cash discount."

There's one gas station in town that has extremely low prices. However, when you pull up to the tank you learn that the price in large letters is the cash price. The credit card price, which is in little tiny letters, is an extra $.30 above that. There's another station with a very low, nearly competitive price that doesn't have a cash discount, and that's where I get my gas.

I don't mind the first guy having a cash discount. I do mind that you don't find out about it until you're at the pump.

Nancy
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Interesting that the page to which you linked had a heading labeled "States Where No Surcharge Laws Protect Consumers."

Allow me to suggest that those states are essentially penalizing those who chose to pay cash, since they are (in effect) subsidizing those who use credit cards.

Of course, poor people are much less likely to have credit cards, so those states have, in essence, enshrined a system that forces poor people to subsidize rich people.

I thank you for bringing this to my attention. My state is not one of the 10 that forbids a surcharge, and henceforth I'll take a 2.9% surcharge on my clients who pay with a credit card.
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I started noticing these $1.00 surcharges popping up on my CC every time I bought gas about a month ago - I actually contacted MC as I thought I was being phished or something - it seemed to coincide with the new year and apparently that's the surcharge mentioned (not just gas stations I have seen it elsewhere too, but primarily gas)
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