Merchants Demand Credit Card Fee Relief

Merchants are pushing for more credit card fee reform, for the fees they have to pay. Every time you swipe at checkout, whether it’s a credit or debit card, the merchant has to pay two fees. One is a flat per transaction fee, the other is a percentage of the total sale, called the interchange fee. Those rewards cards you’re so fond of? They have the higest interchange fees. Those rewards and cashbacks don’t come from a magical reward tree, they’re paid for by the interchange fees. In other words, the Quickie Mart is paying for your “free” airline miles.

Merchants Feel Sting Of Credit, Debit Fees [NPR]

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  1. hypnotik_jello says:

    Keep the fees but allow merchants to charge a higher price to credit card users so cash payers don’t have to subsidize the credit card users.

    • Nogard13 says:

      They can’t hike the fees for using a credit card (per their agreement with the cards) but they CAN provide a cash discount. Most gas stations by where I live already do this (you save about 10 cents a gallon if you pay cash). There is no reason why this can’t spread to other places and items.

      • ARP says:

        I think he hypo-jello may be suggesting to change the agreements to allow that. Your idea is good as well.

      • frank64 says:

        Yes, there is a reason. The card companies made the rules on offering the discount so difficult as to be totally impractical. It works for gas because of the particulars.

        • AustinTXProgrammer says:

          We have a large liquor store chain here in Texas that does the same thing. Cash or Debit is 5% off. They have both prices on the shelves throughout the store.

        • sqlrob says:

          Specs (a large liquor store) does the cash discount thing.

    • esc27 says:

      Should they also charge less for people who walk to the store so walkers don’t subsidize the parking lots?

    • LACubsFan says:

      Cash discounts can ONLY be given to non face to face transactions, and it has to be clearly marked somewhere.

    • bwcbwc says:

      Better yet, ditch the bogus rewards programs so the fees don’t have to be so high in the first place.

    • Naame says:

      Talk about taking a step backwards…

  2. Noir says:

    make the “cash discount” more popular. In my country it’s around 10% in specialized electronic stores, where checks give you between 3 and 7% discout depending on how many you give.

    • yasth says:

      That would far exceed the interchange fees. In person transactions run about 2%-2.5% if you have a decent ticket average, though corporate/international cards cards can add a fair bit more.

    • Amish Undercover says:

      How about they just round down to the nearest nickel for cash purchases? Or if the purchase is sufficiently large, round down to the nearest dime, quarter, or if the purchase is really large, dollar.

  3. Petaluma says:

    No wonder they smile when I use cash… Hey theres an idea pay cash

    • Anathema777 says:

      For smaller items, sure, I’ll pay cash. For services or for bigger items, sorry, I’ll stick with my credit card. There are more protections that come with me using my credit card. So unless merchants start becoming more responsive to consumers when the merchant breaks their end of the bargain, I’m going to continue to use something that gives me the chargeback option.

      • sleze69 says:

        I use my credit card for everything. I was once in San Diego and there were soda machines that take credit cards. 1.5% (that has since dropped to 1.25%) cash back on every soda with my Amex Blue Card.

        I play by the rules and take advantage of all offers. If it is too costly to accept credit cards, don’t accept them.

      • RevancheRM says:

        I avoid cash like the plague. I have to pay someone $3-5 every time I take MY money out of an ATM. Sure, i could use an everyday bank, but I have too many other financial incentives for sticking with USAA, which pays back up to $1.50 for ATM fees. As ATM fees have risen, that means I have to pay more for my money.

        Granted, I’m not being a moral consumer by saying, “Not my problem,” but I’m sticking with my debit card, as its the one advantage as a consumer I can count on. Cash is a burden for me.

    • Coelacanth says:

      No, I really do think there’s a convenience to walking around with credit/debit cards as opposed to carrying cash everywhere. I feel much more secure knowing that in the unlikely event of a losing my wallet, I’m not going to be out much.

      However, I would have hoped that interchange fees have decreased over the years due to increased availability of technology, and transaction volumes. Then again, we’re talking about banks and other financial services companies, so such optimism is unfounded.

    • pecan 3.14159265 says:

      I’m never going to buy a large item with cash. I’m uncomfortable carrying even $100 in cash. Right now I have about $8 in cash, which is rare for me. I just don’t like carrying cash. If there were more discounts associated with using cash, I would consider it – but the cash rewards that come to me at the end of the year via my rewards card would probably be more.

      And it’s more likely that gas stations and small stores would have a cash discount. Best Buy couldn’t care less about something like this.

    • La Mareada says:

      Great, return of the commenters too paranoid of being mugged to carry $10 in cash for incidentals. In the meantime they’re probably carrying at least grand in electronic gear or jewelry or bags. Sorry, but charging your $3 coffee makes you an a**.

    • La Mareada says:

      Sorry Petaluma, I didn’t mean you of course! But the indignation in the responses at carrying ANY cash drives me nuts.

  4. The Federalist says:

    Amex typically charges under 3% per transaction. So I’m not sure how offering a “cash discount” of anything more than that would help.

    • Aphex242 says:

      That’s not entirely true. Most cards (and I believe Amex is one) have a flat fee per transaction and then a percentage on top of that. I believe the fee is generally around $.50.

      It’s why small businesses cringe when you pull out your credit/debit card for a $3 purchase. Without being able to enforce any kind of minimum purchase, they actually lose money on a deal like that.

      Hardly fair. Credit cards are almost effectively a monopoly in the U.S. in terms of market power and merchants are definitely getting the short end of the stick on them.

      To be clear: I don’t run a business.

      • wcnghj says:

        The swipe fee is 29-39 cents.

      • friday3 says:

        Swipe fees will vary depending on the processor and the individual contract negotiated. There is no one size fits all in CC processing. There are hundreds of competitors out there in this field. If a store thinks the cost is too much, they can stop accepting them.
        You also need to realize that from a merchants perspective the amount spent on credit and debit card purchases is significantly higher than from those who pay cash. McDonalds did not start accepting plastic out of a sense of convenience.

  5. guilguiffin says:

    Merchants shouldn’t complain. They aren’t obligated to accept cards. On top of that, consumers have been shown to spend anywhere from 15 to 25% more when paying with a card over cash.

    …as far as reward cards go:
    The average monthly spending on a credit card without a rewards program is $465. With rewards, that spending increases to $890. (Nilson Report )

    • ARP says:

      I think that may only apply in certain stores. Sure, if you go to Wal-Mart, you’re likely to buy more crap than if you had cash. But if you’re going to the corner store to pick up a bottle of wine, I’m not sure they’re getting many add-on or POP sales from people.

      • FatLynn says:

        You are thinking about this incorrectly. It does not mean 15-25% more per transaction, it means overall. Soome of the increase comes from more customers patronizing your store.

        • guilguiffin says:

          What difference does it make? Consumers spending more money each or more consumers in general – either way it’s good for business.

  6. Anonymously says:

    Once I signed up for a merchant services account for a very small, seasonal crafting business. Even though the business was seasonal, I owed them a minimum $35/month in fees despite not processing cards during some months.

    The agreement came with a 3-year contract and an ETF for all future minimum fees. Essentially, you owe them a minimum of 36 * $35.

    With crafts, you can barely account for materials and craft show fees in the price of the item. Once you start to add in credit card fees and *gasp* labor, people stop paying the price.

    It just wasn’t worth it, and thankfully the merchant services provider had a trial period to escape ETF-free from the contract that I took advantage of.

    • wcnghj says:

      There are better mrechant providers out there with no contracts.

    • fotobahn says:

      I am also a tiny business and had the same experience. It wasn’t the “swipe” charge or the percent, it was the monthly charge. I would gladly have paid a higher percent to get rid of the monthly fee. Perhaps some credit card processing company will get smart and set up a system for artists, craftsman and the like with no monthly fee which a lot of us will sign up for and customer, seller, and processor will benefit. When I accepted credit cards I did sell more but not enough to overcome the monthly fees for slow months.

  7. wcnghj says:

    I say reduce the per transaction fee to 5 cents and keep interchange how it is.

    Merchants don’t HAVE to accept credit cards.

    • hewhoroams says:

      Sure, and they don’t HAVE to stay in business either. But I’m sure they’d like to eat and grow business.
      Let’s face it, we’re moving TO credit cards and plastic and electronic transactions, not away from them.

  8. fotobahn says:

    Everybody thinks cash is a no cost. Someone has to count the cash, balance it against receipts, pack it for taking to the bank, take it to the bank. The cost of credit cards to a merchant is, in most cases, is far less than what they lost to bad checks.

    • wcnghj says:

      Bingo! Bigger places like chain stores have such large amounts, they have to hire people to come get it.

      • frank64 says:

        Smaller places don’t, and they believe the cost of cash is less, who are we to tell them their costs?

        • FatLynn says:

          Right, but some still have shrink rates from employee theft and/or errors. Of course the proprietor knows best, but if they are making the case that fees are too high, they should also disclose their shrink.

          • frank64 says:

            I don’t think they really need to disclose anything to us. But the shrink is something that more often comes from merchandise theft. Cash shrink is very likely to be less than the cost of the merchant fees.

            When they raise the costs of soda and say it is because the wholesale costs goes up, do you ask them to prove the costs actually went up? Do you make sure that the increase is in line with the real increase to the merchant? No one asks restaurants what the cost of the beef is when they order a hamburg, it is actually considered rude, but for this topic everyone wants the merchants to open their books. I don’t know why this cost should be so different from any other. Let them decide the policies and costs they want to charge, and let us decide if we want to frequent the store.

    • Coelacanth says:

      Not to mention the risk associated with holding large sums of cash. If stores stopped accepting credit/debit cards, I’d think crime would take a significant uptick.

    • Petaluma says:

      Cash=green stuff in your wallet
      Checks=essentially a promise to pay merchant upon presentation to the bank.

      They are not the same thing.

    • TPA says:

      In small businesses/restaurants, the proprietor often does the work you’ve mentioned, thus yes, there is a killing of time in some respects, but no additional financial cost associated with these other instruments of payment.

      • Kimaroo - 100% Pure Natural Kitteh says:

        Really? What about when cash “magically” “disapears” out of the till. Who eats that cost? At the small business I used to work at, the girl that replaced me stole cash all month long.. it was hundreds of dollars by the time she was caught. You can’t steal credit/debit transactions.

        • ecwis says:

          That’s a good point. I think it’s well worth the 3% to never have to worry that an employee will steal your money.

      • mac-phisto says:

        even if a store proprietor is handling the balancing, many banks assess a fee for processing cash thru business accounts. if you’re dealing with large sums regularly, she’s most likely contracting an armored car service for cash delivery/pickup. not doing so leaves her open to an incredible risk.

  9. Scuba Steve says:

    Isn’t a cash discount the same as charging a higher price for using a credit card? I mean the end result is the same, just calling it something different doesn’t change the reality of the situation.

    10 % Savings by using cash — Really means 10% fee for using anything not cash = Violating merchant agreements.

    But then again they get away with it because 1 – No one ever calls them on it and 2 – Card Companies don’t care.

    • nucwin83 says:

      The merchant agreements specifically allow cash discounts, but not credit surcharges.

      If the merchant has a price of $3.00 listed for an item, you can’t take it up to the register and him go ‘Oh, that’s $3.30 because you’re using a credit card.’ He can, however, say ‘It’s only 2.70 since you’re paying cash.’ The idea is that you’re not enticed to make a purchase because of the listed price only to be slapped with a fee when you go to checkout.

      Gas stations could be in violation when they post their “$X.XX/gal CASH” signs, unless they also post a “$X.XX/gal CREDIT” sign.

      • Scuba Steve says:

        Fair enough, it seems more of a false advertising thing rather than a “paying more for credit” thing. Meaning that you can charge different prices for cash and credit, as long as you don’t advertise it before hand, and you never charge more than the listed price.

    • Tim says:

      Well, no, it’d be an 11.1% fee. 10 is 10% of 100, but 11.1% of 90.

    • floraposte says:

      To some extent, you’re right, but it does actually affect presentation–gas stations with a cash discount, for instance, can’t use that discounted price as the big sign price without notation. In other words, you can’t use the discounted price as the “real” price in advertising and labeling.

    • diasdiem says:

      No, you’re just not allowed to do a surcharge for using a credit card. In that case you’re saying, “Here’s the normal price, and I’m going to penalize you for using a card.” With a cash discount, you’re saying “Here’s the normal price, but you’ll save money by using cash.” It’s all semantics, but it makes a difference.

  10. TPA says:

    I’m cognizant of the merchant fees, thus have a few different cards to handle it. For the true low-volume, mom & pop shop/restaurant, I have a very low-rewards credit card. Practically non-existant rewards on it, but it doesn’t nail the merchants in high fees. For the large chains, out comes the heavy plastic, where I’m get an average of 3-4.5% back over the course of a year.

    Dropping the transaction fee (and leaving the percentage-based fee) would address the issue with lower-cost transactions. Let’s be honest — the banks are making plenty of money on credit cards, even with today’s economy. Does anyone happen to have access to credit card merchant agreements/fee charts for foreign countries? I know many Euro countries have an direct debt/direct deposit system that is superior to our ACH.

  11. ianmac47 says:

    If merchants don’t want to pay fees on credit card transactions, then they don’t have to accept credit cards. Its that simple. Obviously its still profitable for merchants to accept credit cards, or they wouldn’t still accept them.

    This whole thing plays out a lot like NYC Cab drivers that opposed mandatory credit card machines in their vehicles, only to discover they received better tips, even with the card fees.

    Credit cards offer protections for purchases, like assurances that the products will work or insurance and damage protection– things stores gouge customers on all the time. Card fees help pay for these services.

    Again, if merchants don’t want to pay those fees, they should simply stop accepting credit cards. Maybe they will be better off, or maybe customers will simply go to a competitor.

    • FatLynn says:

      Agreed. I have passed up more than one restaurant that didn’t accept credit cards.

    • floraposte says:

      I’m a big user of credit cards, but I don’t see why merchants can’t seek to get a better deal for themselves as consumers of the card service, same as any consumer can do for any other service.

  12. FatLynn says:

    When I go onto a site like GrubHub, I filter by restaurants that accept credit cards online. It is so much easier to enter my order and pay than to call and give info over the phone, be put on hold, deal with mistakes, etc. I am certain I am not the only one who feels this way. I’m really not that sorry that some mom-and-pop restaurant has to pay 3% to Visa, when they are getting the benefit of huge amounts of business that the cash-only mom-and-pop restaurant won’t see.

    • frank64 says:

      Your decision making is legitimate, I just think the small merchants is too, and we shouldn’t be telling them what their decisions should be. They need to make decisions based on what their clientele wants and realize they may lose some business from people like you. It is just another one of many in the give and take between buyers and sellers and that is the way it SHOULD be. Not something forced on them.

      • FatLynn says:

        Yes, the merchant has the right to accept or not accept credit cards. The credit card company has a right to make a profit. Where do you see someone forcing something upon the merchants?

        • frank64 says:

          They are forcing the small merchants to take a loss on individual transactions for the right to make money on others. This only can happen in a monopoly!

          They feel they are forced to accept cards because of American spending habits. The banks are forcing the merchants to pay for something they cannot directly pass on to the customers directly involved in the transaction. They MUST spread the cost out to the cash customers as well, thus hiding the true costs from those who use the service. The banks can raise prices and because the cost is spread out, the increase does not as directly affect usage as it should. They love this!

          I am much a strong advocate of the free market, but I don’t see it here, and that is why I think the merchants have a strong case.

  13. DanFromDetroit says:

    I’ll just continue to us my Amex with rewards because – as it was explained to me by my small business owning mother – merchants pay a monthly fee for the privilege of accepting Amex but no interchange fee.

    • frank64 says:

      I can tell your mother doesn’t accept American Express- or other cards as well because she is wrong. American Express charges more than the other cards and is a reason many merchants don’t take them.

      • FatLynn says:

        It depends on the individual agreement between AmEx and the merchant. For example, businesses that take exclusively AmEx may have a more favorable agreement than those that take it along with other cards.

      • mac-phisto says:

        actually, i think it depends on the situation. i do some bookkeeping for a local merchant & i can tell you that her interchange fees thru amex are lower than the fees she pays for her other payment processor (that handles visa, mc, etc.). not only that, but her payment processor levies additional fees monthly on top of her interchange fees for card processing. amex doesn’t charge her similar processing fees.

        i’ve heard that amex has higher interchange fees than other networks, but after my exposure in this instance, i can’t really say that’s true all the time.

  14. profmonster says:

    We are crazy if we think that the interchange fees aren’t being passed along to the consumer.

  15. Red_Flag says:

    I don’t feel morally obligated to go out of my way to help increase a business’s profit margin — so as long as they accept credit cards I shall use them, interchange fees be damned. If the business thinks the cost of accepting the credit cards is too high, then they can refuse to accept plastic and I will simply take my business to a competitor who does.

    That’s capitalism, folks.

    • Esquire99 says:

      Exactly. I don’t give a damn how much it costs a business to take a form of payment that they voluntarily accept. Clearly if they chose to accept it the cost/benefit landed on the benefit side. If it didn’t, well, they’re just bad business people.

    • ecwis says:

      I would prefer to get 2% cash back (or miles) on everything I spend rather than let that money go to the business. It’s irrational to use cash when I can use a credit card and get rewards.

  16. hypnotik_jello says:

    I’m curious to see if SquareUP can be disruptive enough to give Visa/MC/Amex a run for their money (no pun intended).

  17. Esquire99 says:

    As others have mentioned, businesses aren’t required to accept credit cards. In fact, I know of a number of particularly successful small businesses that do not take credit cards. Why is it the business owners feel the need to go crying to Congress to fix a problem that is voluntary in nature? If they don’t like the deal they are getting with the Credit Card merchants, negotiate. If that doesn’t work, simply don’t enter the contract. But don’t enter into an agreement and then go crying to Congress because you like the benefits you get from the agreement (Ability to take credit cards) yet you don’t like what you have to give in return. When did we turn into a country of people who insist that the government fix all of their problems?

    • Red_Flag says:

      The only argument I can think of is collusion, that all the credit card companies were not competitive in the services they offer merchants, and artificially keeping fees high. Not that I’m saying that’s happening, but if it was, it would be a fair angle from which to ask for government oversight/intervention.

      • Esquire99 says:

        If that’s what the merchants suspect, they should be contacting the FTC or the DOJ Antitrust division to investigate, not asking Congress to legislate. Parallel business conduct, without more, isn’t an antitrust violation.

        • frank64 says:

          The extremely strong bank lobbies have won in this case. Doesn’t make it right. If you need the effects of bank lobbyist to make your point, your point has to be suspect.

  18. Loias supports harsher punishments against corporations says:

    This explains why my bank decided to give me the rewards program on my credit card for free…

  19. diasdiem says:

    I would use cash instead of credit in the case where they have a cash discount from the normal price. For it to be win-win, the discount would have to be higher than my cash back rate, but lower than the transaction and interchange fees for the merchant.

    But if I’m going to have to pay the same whether I use the card or not, I may as well save some money.

    The problem is I don’t carry much cash because credit is so convenient.

  20. hypochondriac says:

    How come when merchants complain about fees most people answer you don’t like the fees don’t accept, but when Customers get hit with credit card fees most people go booo banks you shouldn’t charge that much, rather then saying don’t use a card if you don’t like the fees?

    • frank64 says:

      I have noticed that too, the people who want the merchants to absorb the fees stand behind the rules the bank lobbyist have used to force them on the merchants, but they complain loudly about the rules on us and the protections the banks have. When consumer groups were pushing the changes were these same people fighting these changes too? No. Now the merchants groups are trying the same thing, that is all.

      The good news for you guys is the banks often win. Don’t worry you should still be OK in buying your pack of gum with your credit cards. Let the small business owner take the loss, you have your right to use that CC.

      • Esquire99 says:

        If the small business owner is getting hurt taking credit cards, the logical thing to do is stop taking them. I have absolutely no sympathy for those who voluntarily and knowingly make bad business decisions.

        • frank64 says:

          The problem is they feel they must. It is like you and many here have said, you won’t go to a place that won’t accept them. They feel they must because of people like you. There are many transactions the merchant processes that are profitable, but forcing smaller transactions to be unprofitalbe is wrong. That, even if taken as a whole he feels that he is slightly better off taking cards doesn’t make the loss transactions any more right.

          I as a consumer who doesn’t think it is my job to look out for the merchant, but I still feel that this is wrong. You have a right to look out for your own self interest, but knowing that the banks are forcing him to take a loss on you doesn’t make you think a little? I don’t want a merchant to be forced to do business with me and to have to take a loss, so I use cash for small purchases, you have the bank lobby on your side, but it is not moral in my book.

          • Esquire99 says:

            The bank isn’t forcing them to take a loss. They are choosing to accept a particular form of payment and want to do so without any downside whatsoever. They knew the downside going in (rules re: taking small transactions) but they chose to enter the contract anyway. Now, they are asking Uncle Sam to step in and protect them, which is absurd. I generally refuse to carry cash, and there are only a very, very select few businesses that are cash-only that I am willing to patronize. I don’t care if charging a $1 candy bar to my CC will cause the merchant to lose money; they knew the rules when they started to take CCs and it’s none of my concern whether or not they are profitable. Trust me, most merchants don’t give a damn about you.

            • frank64 says:

              Well, if you don’t care, you don’t care. I don’t care if a cop give you a ticket even if you weren’t speeding. Doesn’t mean the cop is right, it just that I don’t care! Same thing, that you don’t cared is a given, doesn’t change the issue one bit, and why the rules are needed. Common decency now a days needs to be governed by thousands of laws because people have don’t have any. As someone who dislikes government involvement, this troubles me.

              The bank IS forcing them in practice on small purchases to be able to use the cards at all. They need to be able to use cards because that is what people want. Just that you say they don’t doesn’t make it so. If the banks weren’t realizing a loss they wouldn’t be complaining.

              I don’t lay awake caring about the merchants either, that they don’t care about me could be true, but some try to be fair. I do too. Individual transactions are supposed to benefit BOTH parties and if you don’t see that forcing one party to not benefit from a transaction is wrong, then the discussion is meaningless. That you don’t care doesn’t alter the facts.

              • Esquire99 says:

                The other party has a clear choice not to participate in the transaction. The business owner doesn’t have to accept plastic. We don’t need to the government to step in and tell the banks how they need to contract out their services, when use of said services is 100% voluntary. The fact that it’s a very good business decision (generally) to accept credit cards is of little consequence.

  21. frank64 says:

    I think the best analogy is the ESPN and NFL Network, and the cable companies. The network used the power of the channel to forced the channel to be free on a low tier instead of what the cable channels wanted, which was to be a choice that the consumers could make to pay more for the channel. Now if someone wants cable they have to pay for these channels no matter what. The costs get spread out and forced on all consumers, and all for the fewer customers who actually want the channels. The sports channels do this because they make more money this way, just like the banks. It is NOT capatism at all.

    They also force the cable channels to accept often unwanted channels for the right to carry the ones that are in demand. The larger the company, the larger the power they have to do this. I realize it gets a little gray on exactly what a monopoly is in practice(I know there is a hard def that we could apply). But these large companies need to be reigned in regards to how much choice we consumers actually have. In this case we lose our choice to save money buy using cash.

  22. TabrisLee says:

    I’m co-owner of a tattoo parlour, and despite what they show on t.v., most of us don’t make a whole lot of money. It is precisely because of the high credit card transaction fees that we have decided to stay a cash-only business. Not only does it save US money, it saves our customers money because we don’t have to raise our rates in order to cover the transaction fees. We get a few complaints here and there, but once we explain how much higher our rates would have to be, the $2 or $3 surcharge to withdraw cash from an ATM suddenly isn’t a big deal. Besides, it’s our little way of sticking it to the system. If you can’t afford a $300 tattoo in the first place, don’t put it on your card. The companies don’t need any more of your money, and they sure aren’t getting any of mine.

  23. Illusio26 says:

    “the Quickie Mart is paying for your “free” airline miles.”

    And I’m supposed to feel bad for them? I’m pretty sure they are making a profit on the overpriced gallon of milk i just bought from them. They don’t like it, don’t take CCs

  24. esc27 says:

    Seems fair to me. I give up rewards on my card, the credit company lowers fees, and the merchant drops his prices the same amount. That is how it works right?…

    • frank64 says:

      Many cynics will say that he would just keep the money and that means things should stay as they are, but small markets like that ARE competitive. What likely would happen is it would be a part of the pricing decision, taking into account competition and his other costs. In the long run there would be some costs savings, but you should not be looking for a direct immediate costs savings. The power the banks have needs to be looked at as a matter of fairness, and what the merchants do with it is another matter. Again, there WOULD be savings to consumers, but that is almost not the point.

      • Esquire99 says:

        The Federal Government doesn’t need to worry about “fairness” in business-to-business contracts. Both parties are (or should be) sophisticated entities capable of making rational decisions. What this comes down to is merchants that want the advantages of taking credit cards without having to shoulder the disadvantages (costs), and now they want the Govt. to step in and protect them.

        • frank64 says:

          Except when monopolistic power is involved. You forget that. I normally feel like you in regards to government involvement, but here the power of just two entities is just too strong. Again, if a company is forced to take a loss on ANY transaction something is wrong, and it is proof in itself there a monopoly exists. That a merchant cannot charge the individual transaction the true costs of that transaction also is a huge indicator.

  25. LACubsFan says:

    As an employee in the merchant dept for one of the major credit cards, I can tell you that congress will not do anything to change any of the rules. I have no sympathy for stores and their transaction/interchange fees. They willingly entered into an agreement, and all the fees were clearly laid out for them and thats it. The truth is they STILL come out ahead despite the fees.

    Just to clear something up…. the transaction fees are collected by the credit card company (Visa, Mastercard, Amex, etc…) The other fees are collected by the bank issuing the credit card.

    • LACubsFan says:

      Since I can’t edit my own post, I’m posting a correction… and reminding myself that I shouldn’t post things at the end of a long day. My co-worker saw my post and reminded me I was switching 2 rules around.

      1) Cash discounts – Nothing can stop a business from offering a cash discount so long as it’s.
      a) The same discount no matter the amount of the item.
      b) Clearly marked for both credit/cash customers to see
      c) The discount ONLY applies to cash, and no other form of payment (including checks)

      2) Service Fees – Merchants are forbidden for charging fees or a minimum amount for a customer to use a credit card. Merchants can lose their ability to take cards, and be fined thousands of dollars for doing this. One of the main rules is that this can only be charged on non face to face transactions. For example Arco gas stations charge .45 to use a card at the pump, but they are not allowed to charge that fee if you go and pay the cashier inside.

  26. soj4life says:

    cost of doing business. If you don’t like the fees for accepting plastic, then stop taking plastic and see your sales drop.

    if the stores force congress to lower the fees, the consumer will pay for it on the back end when their statement comes; consumers will just spend less if their rates and fees go up.

    • frank64 says:

      They are not going to force them to lower the fees, just allow the merchants a little leeway about minimums. If the stores were allowed to not accept charges below a set limit, something tells me the high swipe fees they pay will come down to a level that the merchants can accept. Then everyone wins. Right now the banks have strong pricing power, give the merchant some power and the banks will come around.

      • LACubsFan says:

        The minimum rules are not from the banks, they are from the credit card company and won’t change. A company is not going to change the rules to make it harder for their own product.

  27. kenposan says:

    I used to eat a place that stopped taking credit cards completely because of fees.

  28. zzxx says:

    I am surprised because nobody mentioned this but……..

    I work a job and a good one. I pay tax on every penny that i earn. I feel that everyone should also do that. So…I use a credit card to force these businesses to pay tax.

    I see tax cheating rampant in the small business community, even beyond restaurants. A neighbor of mine (I live in NY) owns an insurance agency in NJ. All of his cars (wifes and kids too) have NJ plates. Is he writing them all off? Another neighbor of mine owns an awning business in NJ. Same deal, all cars have NJ plates. He’s writing them off.

    I would like to see this country strictly enforce the tax laws. It would help the working middle class immensely. Use a credit card. Make them pay their fair share of tax.

  29. zzxx says:

    I am surprised because nobody mentioned this but……..

    I work a job and a good one. I pay tax on every penny that i earn. I feel that everyone should also do that. So…I use a credit card to force these businesses to pay tax.

    I see tax cheating rampant in the small business community, even beyond restaurants. A neighbor of mine (I live in NY) owns an insurance agency in NJ. All of his cars (wifes and kids too) have NJ plates. Is he writing them all off? Another neighbor of mine owns an awning business in NJ. Same deal, all cars have NJ plates. He’s writing them off.

    I would like to see this country strictly enforce the tax laws. It would help the working middle class immensely. Use a credit card. Make them pay their fair share of tax.