stores to start charging for using credit cards

[SandEagle]

http://www.nbcnews.com/business/attention-shoppers-another-credit-card-fee-here-1C8086499

It could soon cost you more to shop with a credit card at some stores. As of this Sunday, Jan. 27, merchants who accept credit cards issued by Visa and MasterCard will be allowed to add a service charge to the purchase price.

Visa and MasterCard had always prohibited merchants from doing this. They agreed to change the rules and allow the surcharge as part of the settlement of an antitrust suit brought by retailers.

The surcharge is supposed to equal the actual cost of processing the credit card transaction, which is typically 1.5 to 3 percent. Under the agreement, the fee is capped at 4 percent. The surcharge can vary based on the type of card. For example, it could be higher for a rewards card or premier card.

first it was gas stations charging 10-20 cents more per gallon if you used your credit card. now shops will tack on fees if you plan to do a cc transaction. :hmm:

 

[Broheim]

they've been doing it here in Denmark for a while, I'm not opposed to it.

 

[AnonymouseUser]

As a business owner who accepts credit cards, I approve of this, though I won't likely charge my customers the fee.

 

[Engineer]

they've been doing it here in Denmark for a while, I'm not opposed to it.

I am. Unless stores are suddenly going to lower their prices the 1 to 3% for those paying cash, then fuck them. They have the credit card fees built into the price of the items to keep their profit margin. Adding 1 to 3% at this point without lower prices would be just padding the profits.

I'll either:

a.) Quit shopping nearly as much.
b.) Pay by cash
c.) Write a check and I'll not start writing it until the entire transaction is complete and possibly bagged. (Yes, I'll be an ass about it).

I might consider using it if my reward is far more than the fee. Otherwise, I'm not paying extra to use a card, period.

 

[Jeff7]

Bummer.

Oh well. Cash has inherent costs as well, they're just paid through other means: Minting money, new anti-counterfeit designs, and the costs of transporting, counting, and storing physical cash. Some is paid through taxes, some is paid directly by the stores. (I'm sure that armored transport services aren't free.) I just wonder how much it actually works out to be.
Unfortunately, we'll end up paying for both cash and cash-free for quite awhile, I'm sure.

Are there any non-profit credit card companies out there?


Darn trading costs.

 

[RockinZ28]

Credit card surcharges are banned by law in 10 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Visa and MasterCard have rules that require retailers to handle credit cards the same way in all of their stores across the country. That means a chain with stores in any of the 10 states where a surcharge is banned would not be able to have a surcharge at any of its stores.

Well I'm safe, most people probably are. Although it doesn't stop merchants from doing it anyway. Mostly small private businesses do it around here, and I'd bet mostly to encourage cash use so they can cheat on their taxes. That's about all this change seems to do, since any chain with a store in a banned state can't do it in non-banned states.

 

[phucheneh]

The problem isn't really the stores. Retail, in most common cases, is not exactly the most lucrative market to be in. Markup on many things must be quite low to compete, and when you factor in all the overhead, the fees that THEY get charged with regards to credit/debit transactions is quite significant.

You need to go one more rung up the ladder. The people processing these transactions make a killing. You're talking about someone that offers no 'product' or 'service' in the general sense of the words. I associate 'service' with someone who uses a skill and/or time/labor to do something for you.

Processing transactions between you/the store and a bank using automated computer means does NOT cost anywhere near what they have come to charge. AFAIK, it used to be a small flat fee...that seems to now be turning into a percentage that, when considered on top of the cost of a large purchase, is quite obscene.

I may be wrong with regard to large retailers. But I know for a fact that the little guys are getting increasingly reamed. For that reason, I now try to always carry cash for small purchases at locally-owned convenience stores and the like (big chains, notsomuch).

 

[Staples]

It's only fair.

Just like charging local tax on online purchases.

 

[Wonderful Pork]

There are laws on signage required also, like in the website (if ordering online) and by the registers. It also needs to be a separate line item on the receipt as well.

I will not patronize a business that has a price increase due to this; I don't think that the major places(Target, Amazon, etc) will pass this along. I'll continue to go to the local pizza shop with a $20/min cause I always paid cash there.

Additionally, if my credit card rewards don't double I'll plain stop using them too and just use debit.

 

[Ns1]

I only carry card so I'll just shop elsewhere. Amazon is happy to take my money.

 

[dud]

There is no way I am going to pay this "fee". I will use cash before I lower myself to this level.

 

[Staples]

And another thought, if you have a store credit card, it costs them 0 to process transactions and that is why a lot of the time they offer 5% off to entice you to use it. I doubt there will ever be a surcharge on these although if they start charging surcharges for credit cards, then I am not so sure that using their store cards are any advantage to them except for financing and possibly collecting interest of late payments. I just hope Target and Lowes continues their 5%.

 

[phucheneh]

And another thought

You and your buddy Office Depot are on the wrong side of the issue in this thread.

 

[coldmeat]

So it costs up to $30 to process a $1000 transaction? Bullshit

 

[AnonymouseUser]

So it costs up to $30 to process a $1000 transaction? Bullshit

$35 or more if it's a "rewards card". And it is bullshit, which is exactly why retailers want to charge the fees. This doesn't even account for the cost of the machines, insurance, and other fees associated with accepting credit cards.

 

[Ns1]

So it costs up to $30 to process a $1000 transaction? Bullshit

Yes that is correct.

 

[actuarial]

I'm conflicted on this. I have no problem with fees for using a service, but at the same time it's only coming about because stores are trying to skirt an agreement they made.

If stores don't want the costs of processing a credit card, then don't accept them.

Now, if Visa or Mastercard came to an agreement with the stores, or an individual store, that they could charge fees I'd be more than fine with it. I may stop shopping there though if it makes it more expensive then their competitors.

 

[SandEagle]

So it costs up to $30 to process a $1000 transaction? Bullshit

maybe $40. other sources are saying it can be as high as 4%.

http://abcnews.go.com/Business/credit-card-fees-effect-sunday/story?id=18316310

http://bostonherald.com/business/business_markets/2013/01/new_credit_card_charges_set_hit_consumers

 

[OILFIELDTRASH]

Well I will have no reason to use credit cards anymore. Credit cards will be like payday loans where only the desperate will use them.

 

[EagleKeeper]

Originally it was $0.35 plus a 1-3%.

The change was the actual cost and the percentage was the convenience fee that the merchant was willing to pay for the customer.
Part of the fee was to go to the service vendor, the company that installs the swipe units: the rest to the card issuer. Insurance against fraud and profit.

When consumers are liable for $50 on your $1000 TV purchase that you use a valid card for that was "stolen" , someone eats that $950. That is what the service fees covered.

 

[waggy]

yeah it's bullshit. I will wait and see what stores do it. or switch back to checks/cash

 

[RockinZ28]

Jesus, no one even reads the article and are swearing off credit cards already lol.

“The bottom line is that very few retailers would be able to surcharge under the settlement, and that the vast majority don’t want to surcharge even if they could,” the NRF’s Sherman said.

 

[Ksyder]

I'm not against the idea of placing a surcharge on small transactions, like less thank $5.

 

[phucheneh]

Originally it was $0.35 plus a 1-3%.

The change was the actual cost and the percentage was the convenience fee that the merchant was willing to pay for the customer.
Part of the fee was to go to the service vendor, the company that installs the swipe units: the rest to the card issuer. Insurance against fraud and profit.

When consumers are liable for $50 on your $1000 TV purchase that you use a valid card for that was "stolen" , someone eats that $950. That is what the service fees covered.

If banks and the other mentioned companies were using the fees as insurance against losing money on fraud...then why do they have an insurance company?

And you know who also has insurance? The insurance company. Yes, it's as retarded at it sounds. There are corporations with billions of dollars on hand who rarely do more than sit around and twiddle their thumbs.

 

[Broheim]

I am. Unless stores are suddenly going to lower their prices the 1 to 3% for those paying cash, then fuck them. They have the credit card fees built into the price of the items to keep their profit margin. Adding 1 to 3% at this point without lower prices would be just padding the profits.

oh, should have read the article all the way through, using a percentage is fucking retarded. around here it's a flat charge, a quarter for the card I use.