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Discussion Starter #1
I'm posting this as information because most people don't know it but need to.

When I placed my first order for blank t-shirts yesterday I noticed I was charged a "less cash discount" fee. When I asked what that was I was told it was because I was paying with a credit card. But if you pay POS cash they charge you a $9.00 COD fee. I'm taking it up with the company but I wanted everybody to know that they can't do this by law in many states, and it's against MasterCard/Visa policy in all states. They (and you) can be reported and lose your ability to accept credit cards or even be fined if you charge your customer for taking their credit card.

There are more sources of the information but this is a good place to start if you weren't aware.

Charging Customers a Fee to Pay with a Credit Card

Charging Customer to Pay with a Credit Card and Passing Credit Card Fees to Customers

Convenience Fee: Charging Convenience Fees for Credit Card Transactions

If your vendors are doing this, please inform them that they can't. We don't want them to raise our prices but if nobody can do this they'll still forced to stay competitive.

Some of them try to get around it by charging a lower cash price. This is fine, and legal but they can't advertise a price and then charge you because they were showing the "cash" price. The cash price must be a discount to their standard advertised price.

If you've ever gone to a gas station to get a soda and they've told you it's a minimum $5.00 to use your credit card. That is also either illegal or against MC/Visa policy.

Accepting credit cards should be accepted as a normal cost of doing business. By accepting credit cards you will get more business and therefore more income. By not accepting them you will lose business. It is not a something that should be passed onto us as customers (or to our customers).

I hope this helps somebody!
 

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I have had this gripe with S & S for a couple years. I try to order from them only when I can't get it anywhere else. really gripes me
 

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Alittle off the subject, but in the late '80's I was in retail- and watched that field.. A guy was in Victoria Secrets and the cashier kept trying to coax him to use something besides American Express card while wrapping his purchase. Turns out he was a VP for Am Ex... did not go well for The Limited Co who owned Vic Sec....EVERYONES looking to save the fees!!!
thanks for the ammo/info!
N
 

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I just want to state that there is a huge difference between offering a customer a discount for cash payments compared to charging someone for credit card fees. This is discussed here in this article you posted above - Charging Customers a Fee to Pay with a Credit Card. So really, the key is all about how you phrase the pricing.

Most companies will just increase their regular pricing to cover the cost of using credit cards. This is good business as you need to take into account all your expenses. But this assumes that everyone is paying with a credit card. I try to pay with a credit card with everything I buy for my businesses because it is a form of record keeping. So I am willing to pay more (3% or so) to make the record keeping easier for me.

It is all about perspective in my opinion.

Mark
 

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Discussion Starter #5
I have had this gripe with S & S for a couple years. I try to order from them only when I can't get it anywhere else. really gripes me

You can report them directly to MasterCard. They will take care of it for you. If the vendor refuses to comply they will have their merchant account canceled and simply blacklist them making it impossible for them to get a merchant account with anybody.
 

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Discussion Starter #6
You are absolutely right in that it is good business to take into account all of your expenses. I don't believe it is all about perspective though. It doesn't assume that everybody is paying with a credit card. It actually assumes that most will not be paying using cash. Considering we order from our vendors mostly online, cash is the most inconvenient way to pay and therefore it would be a logical assumption.

The law or MC policy states that they can't charge a fee. Which means all of their pricing must reflect their price with whatever they need to charge to cover their credit card costs worked into their product.

I do have a problem paying 3% for using my credit card if they are telling me I'm being charged an additional 3% over their advertised price because of my payment method. If they want to give me a discount for paying cash, dandy. Otherwise I want to know when I'm shopping that the price I'm looking at is the price I will pay.

People not having a problem with the 3% illegal or policy breaking fees are the very reason they've gotten away with continuing to charge it. And also why it is so difficult to compare companies pricing "apples to apples". When some of them advertise cheaper but then add in fees here in there it keeps them from being upfront honest about their overall pricing. Vendor A may look less expensive than Vendor B but in reality if Vendor B doesn't have additional fees and are upfront with their pricing then it's really just false advertising in my opinion.

If they are charging you 3% and you know it... they aren't doing it correctly and can be reported or fined.
 

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this is pretty funny. if you pay your taxes online via a credit card to both state and federal they will charge a 3% 'convenience fee'
 

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I stopped Am. Ex. They charge you monthly even if you don't take a card from one of their members. Never had someone tell me to pay more for using a card. I don't see how they can even try that. Everyone I buy from is online, I have to use a card.
 

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I use to offer credit card facilities but stop doing so.

One thing I can't understand is why shops are prohibited from charging extra fees for the cards while the banks and credit card companies are not. In the Philippines, bank charges a fee of around 4.5% and a shop must remit a minimum amount of transactions per month.

If card transactions are "extra income" for shops it must be the same for banks. On top of that, banks have the privilege of investing your money in various investments for at least a few days to mostly more than a week earning income from them.

Anyway, just trying to give an insight into the possible reason why some companies charge a fee. It is against the law, but for me, I will simply not patronize the shop and buy from shops that do not charge a fee. I wouldn't report it to the card company though because from personal experience, I can emphatise with them.
 

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Discussion Starter #10
this is pretty funny. if you pay your taxes online via a credit card to both state and federal they will charge a 3% 'convenience fee'
That is legal. A convenience fee is something different. I think I linked to that article as well. A convenience fee may be charged by certain government agencies, taxing authorities, and other officials for taking a type of payment outside of the "normal payment parameters" for your convenience. For example - the water company can charge it because their primary method of receiving payments is still checks through the mail. Therefore they can charge a "convenience fee" for allowing you to pay with your credit card. They don't usually have their own merchant account either but use a 3rd party.

Never had someone tell me to pay more for using a card. I don't see how they can even try that. Everyone I buy from is online, I have to use a card. '
Places aren't trying it. They are doing it all the time. S&S, TSC Apparel, and others. Everyone I buy from is online as well. I don't run into it too often online, but I did when I placed an order yesterday which is what prompted me to post this. I'm in Houston and small convenience stores try it all the time too.

Did you know that when a place asks you for two forms of I.D. (DL & a credit card) to accept a check, they can get in trouble for that? It's a fraud risk. They can look at your credit card but they are not allowed to write down any information from it if you are paying by check.
 

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Discussion Starter #11
Anyway, just trying to give an insight into the possible reason why some companies charge a fee.
I understand why they charge a fee because I did it years ago before I realized it was illegal. The truth is that its a cost of doing business and should be worked into the overall pricing of your product. I'm not saying its not okay to pass that fee to the customer. I'm just saying it shouldn't be done in a way that ultimately allows them false advertising on their pricing.

If you know you're paying a fee for using your credit card, they aren't doing it correctly.
 

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I understand why they charge a fee because I did it years ago before I realized it was illegal. The truth is that its a cost of doing business and should be worked into the overall pricing of your product. I'm not saying its not okay to pass that fee to the customer. I'm just saying it shouldn't be done in a way that ultimately allows them false advertising on their pricing.

If you know you're paying a fee for using your credit card, they aren't doing it correctly.
In practice, almost all fees, costs and expenses should, and are, added to the price of a product. That is the essence and nature of a business enterprise.

In the competitive nature of my business where most competitors are either home based or hold shop in low profile areas, they attract a large chuck of the market by their lower prices. They can afford not to charge additional fees for credit card transactions because they grossly underdeclare their sales. They saved on the 12% VAT so, even without charging for credit card transactions of around 4.5%, they still save (or earned) 7.5% (12-4.5).

I am not sure what the situation of shops in the US is but I think most shops understands the goodwill they will lose by the extra charges and just felt it is better off to charge them. Or maybe they just want to "convince" shoppers to buy cash.

Now, a wrong practice is a wrong practice which is why I opted out of credit cards.
 

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You can report them directly to MasterCard. They will take care of it for you. If the vendor refuses to comply they will have their merchant account canceled and simply blacklist them making it impossible for them to get a merchant account with anybody.
A very noble thought.
I'm not saying it won't happen, but, if it is a large merchant, I wouldn't hold my breath.
They (Visa/MC/AMEX) are not about to shut off a large income stream (fees charged) because of that, if it is a small merchant they might send a letter.
I know it's not fair, but that is the way of the world.

Also, it is very hard to prove they are doing it.
They could say the regular price is X, and cash customers pay X% less, if you pay by CC you don't get the same discount.
Many retailers will increase prices by a couple of % to account for the fee, they can then offer a cash discount and keep within the spirit of the rule i.e. not charge extra for using a credit card.

Be aware, there are also different rules for different regions of the world. The rules in USA are different to Europe, Asia/Pacific etc

For example, in Australia where I am, merchants are able to pass on transaction fees to customers. So, if you purchase from an Australian merchant you MAY be charged a fee for using a CC. I say may be charged, as it is not compulsory and not all merchants do, but more and more are choosing to pass them on.

In my case, transaction fees are quite low 0.8% for Visa/MC & 1.85% AMEX per transaction.
While I am able to pass these fees to customers, I choose not to... at this time.
 

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Discussion Starter #15
Also, it is very hard to prove they are doing it. They could say the regular price is X, and cash customers pay X% less, if you pay by CC you don't get the same discount.

In my case, transaction fees are quite low 0.8% for Visa/MC & 1.85% AMEX per transaction.
If they aren't doing it legally then it is quite easy to prove. If you know you are being charged 3% or like in my case it's on my invoice as a "less cash discount" charge then it isn't legal and would be very simple to prove. It's actually on my invoice. It should be built into the price and if you pay cash then they give you the discount. Not have their pricing listed and when you order and go to pay all of a sudden you're being charged an additional 3.5% because you are paying with a credit card. That is when it's a problem for me. I don't know... to me it seems shady because they aren't up front about it.

The fees in the US are definitely higher than Australia's. :)
 
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