I was charged extra for using my credit card

[Elwar]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

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[wtfvanity]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

Was $37.50 the extra or was the extra the $2.50?

[Anon136]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

awesome, as they should. Why should consumers be forced to eat that cost in the form of higher prices. When everyone pays the same price no matter if they are paying with a card or with cash, this is effectively transfers wealth from credit card users and cash users to the credit card company in the form of higher prices for all (with the card user being partially or wholly compensated by how ever much utility he/she derives from using a card instead of cash). This form of discriminated on the part of store owners will help to foster an incentive structure that rewards efficiency and punishes waste, which makes everyone better off (except for the guy who owns the credit card company).

[MoonShadow]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

Yes, a group of retail businesses just won an anti-trust lawsuit against the CC companies, on the basis that the common practice that vendors must hide the 'interchange' costs from costumers amounted to market collusion.  The court finally agreed.  You'll see more of that going forward.

[Korbman]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

This is normal. Businesses pay the credit card companies a fee when a card is used. Instead of absorbing the costs, it's usually passed on to the customer. Gas stations sometimes do the same thing.
A 7% increase does seem a little steep though...

[Isokivi]

This is good and healthy (in many ways). In my dayjob credit card purchases affect profits signifigantly, for example amex can take 4% off the top. Which is a lot when your working with goods where pricing is very competitive, for example groceries.

[MoonShadow]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

This is normal. Businesses pay the credit card companies a fee when a card is used. Instead of absorbing the costs, it's usually passed on to the customer. Gas stations sometimes do the same thing.
A 7% increase does seem a little steep though...

Theu used to do the same thing in the US in the 1980's and before.  That ended with the vendor contracts I mentioned.  We're likely to see it again soon, though.  This is on reason that CC's are more popular with US citizens than in other countries, as much of the cost of useing a CC has been hidden from the consumer in the form of unnaturally higher prices.

[wtfvanity]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

This is normal. Businesses pay the credit card companies a fee when a card is used. Instead of absorbing the costs, it's usually passed on to the customer. Gas stations sometimes do the same thing.
A 7% increase does seem a little steep though...

7% isn't bad. Think about it, 1% on that purchase for the flat rate, plus 3% for the transaction fee. Then think about how much he has to pay in taxes when the cash just goes in his pocket. It costs him much more than 7% to have a paper trail.

[MoonShadow]

I went Kayaking the other day and rented a kayak.

The charge was $35. But they said "if you're going to use a credit card we charge extra". I used my credit card and they charged $37.50.

This is normal. Businesses pay the credit card companies a fee when a card is used. Instead of absorbing the costs, it's usually passed on to the customer. Gas stations sometimes do the same thing.
A 7% increase does seem a little steep though...

7% isn't bad. Think about it, 1% on that purchase for the flat rate, plus 3% for the transaction fee. Then think about how much he has to pay in taxes when the cash just goes in his pocket. It costs him much more than 7% to have a paper trail.

I agree, 7% is on the high end of normal, but isn't out of reason.  4% is about average just for the interchange fees, not counting any other fees.

[DeathAndTaxes]

No 7% isn't on the high end 7% is just a way to the merchant to pad his pocket.

The court decision limits surcharges to actual costs or a max of 4%.  Any swiped merchant is going to pay <2% these days.  Hell Joe Blow with 0 days business experience can get an account with Square (or a host of other providers) and swipe cards at <3%. 

[farlack]

Square charges 2.75% if the card is present. 7% is robbery and he just stole from you.

Most processors charge less than 1.99% and you can always find one that's cheaper. I've heard its as low as 1.5%.. I'm not 100% on the facts, but I also learned that when you sign up the person who signs you up makes the extra %'s.. So they're making 1.5% of your transactions, so they can always lower it and only make .5%..


Robbery.

[MoonShadow]

Square charges 2.75% if the card is present. 7% is robbery and he just stole from you.

Most processors charge less than 1.99% and you can always find one that's cheaper. I've heard its as low as 1.5%.. I'm not 100% on the facts, but I also learned that when you sign up the person who signs you up makes the extra %'s.. So they're making 1.5% of your transactions, so they can always lower it and only make .5%..


Robbery.

Nonsense, that is not all of the charges.  Square doesn't charge for the 'interchange' fees, because they don't have too, the contracts that the CC companies had with the vendors and each other negates most of that.

And nothing in this conversation includes the interest and fees that the cardholder eats due to his own contract.

[farlack]

Square charges 2.75% if the card is present. 7% is robbery and he just stole from you.

Most processors charge less than 1.99% and you can always find one that's cheaper. I've heard its as low as 1.5%.. I'm not 100% on the facts, but I also learned that when you sign up the person who signs you up makes the extra %'s.. So they're making 1.5% of your transactions, so they can always lower it and only make .5%..


Robbery.

Nonsense, that is not all of the charges.  Square doesn't charge for the 'interchange' fees, because they don't have too, the contracts that the CC companies had with the vendors and each other negates most of that.

And nothing in this conversation includes the interest and fees that the cardholder eats due to his own contract.

That should all be added in with your cost to rent, not given to the customer as an extra tab.

Advertising something as $100 then charging $107 because of your fees is crazy. I doubt anyone is charging 7% in any fees to swipe a card.

[Elwar]

Just checked my charge again. $37.30 to be exact.

But 7% would make sense in that our sales tax is 7%.

So by taking cash they have no paper trail. With a credit card they eat the CC fee and charge you sales tax.

I have noticed a few more gas stations charging based upon credit card or cash.

[farlack]

Sales tax 

Thinking they charged you just for using your card.

[Anon136]

if i ran a business i would advertize in card price and tell everyone i give a "cash discount" =)

[MoonShadow]

Square charges 2.75% if the card is present. 7% is robbery and he just stole from you.

Most processors charge less than 1.99% and you can always find one that's cheaper. I've heard its as low as 1.5%.. I'm not 100% on the facts, but I also learned that when you sign up the person who signs you up makes the extra %'s.. So they're making 1.5% of your transactions, so they can always lower it and only make .5%..


Robbery.

Nonsense, that is not all of the charges.  Square doesn't charge for the 'interchange' fees, because they don't have too, the contracts that the CC companies had with the vendors and each other negates most of that.

And nothing in this conversation includes the interest and fees that the cardholder eats due to his own contract.

That should all be added in with your cost to rent, not given to the customer as an extra tab.

Advertising something as $100 then charging $107 because of your fees is crazy. I doubt anyone is charging 7% in any fees to swipe a card.

Is advertising something as $107 and then offering a $7 discount to cash customers any different?  Because that's basiclyhow it's been done for the past 30 years.  Yes, 7% is on the high end, but not unrealistic for a small vendor that does not frequently need to use the CC network.  7% would be very high for a volume user, such as a brick & morter retail chain of any size; in such a case the 2.x% charged by Square (due to the volume that Square can accumulate) is much more realistic.  WAl-mart can negotiate for better terms from Visa, but a small kayacking store probably can't.  I'd bet dollars to doughnuts that any business with a building of their own can't use Square due to the TOS, or Visa would have a fit.

[MoonShadow]

if i ran a business i would advertize in card price and tell everyone i give a "cash discount" =)

You would would be contractually prohibited from actually advertising the cash discount, but everyone does it.  You could go into any major electronics store right now, pick out some high dollar widescreen tv, and even if it's on sale, you could ask for the 2.x% that the company pays the CC company as an additional discount if you paid in cash, and you can expect to get it.  I've done this a dozen times over the past decade alone.  It's just not worth the effort for low value items, although I have done it at Wal-mart for a microwave that was listed for only $80 on sale at the time.  The only time that I can't expect to get it, is when the manager is busy and would consider the discount to not be worth *his* time.

You also can't expect to do this with anything in groceries.  Their margins are so tight, that the 'grocery side' of department stores don't make *anything* from there unless the customer is paying cash anyway.

BTW, this is a great way to get a new refrigerator if you've got the cash, but you would literally have to have the cash in your hands.  The managers are usually empowered to offer this cash discount, but are trained to deny the request unless they can see the cash; because so many people have been known to only have half the cash and then offer the rest as a personal check.  The big chains have been stung many times, and regard this as a kind of 'bait and switch' game.

[farlack]

Square charges 2.75% if the card is present. 7% is robbery and he just stole from you.

Most processors charge less than 1.99% and you can always find one that's cheaper. I've heard its as low as 1.5%.. I'm not 100% on the facts, but I also learned that when you sign up the person who signs you up makes the extra %'s.. So they're making 1.5% of your transactions, so they can always lower it and only make .5%..


Robbery.

Nonsense, that is not all of the charges.  Square doesn't charge for the 'interchange' fees, because they don't have too, the contracts that the CC companies had with the vendors and each other negates most of that.

And nothing in this conversation includes the interest and fees that the cardholder eats due to his own contract.

That should all be added in with your cost to rent, not given to the customer as an extra tab.

Advertising something as $100 then charging $107 because of your fees is crazy. I doubt anyone is charging 7% in any fees to swipe a card.

Is advertising something as $107 and then offering a $7 discount to cash customers any different?  Because that's basiclyhow it's been done for the past 30 years.  Yes, 7% is on the high end, but not unrealistic for a small vendor that does not frequently need to use the CC network.  7% would be very high for a volume user, such as a brick & morter retail chain of any size; in such a case the 2.x% charged by Square (due to the volume that Square can accumulate) is much more realistic.  WAl-mart can negotiate for better terms from Visa, but a small kayacking store probably can't.  I'd bet dollars to doughnuts that any business with a building of their own can't use Square due to the TOS, or Visa would have a fit.

Giving a discount and charging extra is two different things, be ignorant more please.

You obviously have never used a creditcard processor.

First off 7% is unheard of unless you're selling high risk products. Please stop being ignorant and saying 7% is a normal price because you have no idea what the hell you're talking about. It does not matter if you're doing $100 in sales a day or $1000 they're not going to charge you any different rates, unless your doing massive amounts of money.

As for square, again you owe me doughnuts, or money, I like both.

https://squareup.com/register

I use square every single day.
Why them at 2.75% vs someone else at 1.99%?

1. Square I don't need to rent a swiper that costs $50-100 a month on a 4 year contract.
2. I don't need to pay $50-100 a month gateway fees.
3. I don't have all the other crazy fees.
4. Square deposits next day vs 3-4-5 days for other processors.

[DeathAndTaxes]

You would would be contractually prohibited from actually advertising the cash discount, but everyo

Not any more.  That was what the court case was about.  The courts agreed that the prohibition on cash discounts and the prohibition on charging consumer for using credit cards amounted to collusion between the major credit card networks.

Today merchants are free to offer any discount % for cash buyers.  Merchant can offer 50% off to cash buyers if they want.
Today merchants can charge consumers a surcharge on credit cards but not more than the actual interchange rate or 4% which ever is less.

The 7% in the OP was simply a merchant ripping a consumer off.  The court decision is relatively new most people don't know the details I expect a like of stuff like this going on for a while.