Extra charge for paying with credit card?

Butch

Hi,

Just out of curiosity: I've seen some retailers - especially online - charging a certain % extra for paying with a credit card, instead of cash or debit card.

As a Visa customer, my perception is that my cc is a replacement for cash. It is the retailer who shoud absorb the transaction costs and not passing them to the consumer.

Any opinions on this topic? I never called Visa and asked about this, but I should...

Cheers,
Butch

Typedef

Banks demand extra money for validating credit cards.

Thus either the retailer can take the hit or pass it on to the consumer.

American express apparently are the most expensive vis-a-vis retailer transactions and simply won't do discounts.
Though my anecdote is based purely on hearsay.

Butch

Originally posted by Typedef
Thus either the retailer can take the hit or pass it on to the consumer.

Well, that is exactly my point. In other countries the contract between Visa and the retailer clearly specifies that they cannot pass it to the customer under any circumstances, either by charging extra or by offering "discounts" by paying in cash.

Let alone this opens the door for non-transparent practice, as the consumer is usually unaware of the cost of the transaction, so the retailer can charge any percentage he likes as "credit card transaction charges"...

tribble

I think it's fair enough.

I mean if a customer who pays in cash is more valuable to a retailer than a customer who pays by plastic then why not give him a discount (or charge the plastic man extra)?

Indeed by not doing so a retailer is mearly protecting the cc companies profits at the expence of ALL (incl. cash) customers, who then pay extra. Effectivly jacking up prices for everybody.

I use a cc for internet purchases and don't mind being charged more than cash customers - I see it as a charge for the ease of use and peace of mind (cc. insurance)

tribble

mneylon

We accept CC payments via a third-party. Every CC transaction (including those blocked due to fraud etc) are subject to a $1 transaction fee as well as a percentage.
We also take payment by cheque, EFT and any other reasonable means.

The CC costs are a pain, but we would prefer to absorb them rather than have to deal with multiple cheques which cost us money as well.

Dooom

anyone seen those ads on tv the ones with - "use your credit card and get this video free!" those ones? whats the story behind that?

Jokah

"Thus either the retailer can take the hit or pass it on to the consumer."

Banks charge the retailer a handling fee for accepting credit card transactions. That is true.

Some retailers out there take advantage of this however.

I can't name a particular company. But, They charge a fee for paying by credit card. Usually 10% of the price of the transaction. Now spokesperons say this is to cover bank charges. ehhhhhhhhhh WRONG!.

Typical bank charge for handling a CC transaction varies but it is anything up to 12 cent.

Some companies charge 1.50euro, saying that "oh this is to cover the banks cost". Horse crap.... the 1.37 euro goes to the retailer and the customer is none the wiser..

Now, ONLY A SMALL PERCENTAGE of retailers are offenders. Very Small percentage. There are always bad apples out there.

Woden

I think it fairly sucks my own experience of it is with ryan air where they charge you €6 to book with you credit card while if your from england you can do it for a £1 with your debit card

Jokah

"they charge you €6 to book with you credit card while if your from england you can do it for a £1 with your debit card"

Yeah and you know where that money is going! I'd say a massive amount of money is made off CC and online transactions. its horse crap and a real pity. I'd like to name more companies but I cannot.

Sleipnir

that's complete horsesh!t. The retailer usually absorbs the cost because they are guaranteed payment by the cedit card company, even if the transaction was a fraudulent one. To a retailer cash is the best, because the money is in their hand, next comes credit card, because payment is guaranteed and next is cheque, which everyone hates because they take days to clear and are generally a PITA.

CC is also more secure than having cash around the shop.
The old "get a free video if you use a CC" is again to stop people sending cheques which are annoying.

There are charges to the retailer for using credit cards, but it is in their best interests that their customers use them.

myhandle

Originally posted by Typedef
...American express apparently are the most expensive vis-a-vis retailer transactions and simply won't do discounts...

Ah, so that's why no one accepts AMEX then.

Typedef

Exactly

Butch

For clarity's sake, I've just called Visa BOI Customer Service department.

In summary:

(1) There is no SLA between Visa BOI and customer as whether Visa should be 100% replacement for cash.

(2) In other words: Is discretionary to the retailer whether to absorb the transactions costs or pass them to the customer.

(3) The retailer must tell the customer up front of any additional charge by using CC

(4) It's up to the customer to negotiate these charges with the retailer.

IMO: Nice crack to pass on additional charges and extra profit. Someone mentioned 10% !!! That's pure extorsion. (and yes, I know the final decision is up to you).

Butch

Jokah

"(4) The retailer must tell the customer up front of any additional charge by using CC."

Haha, thats a laugh. You really think retailers are going to tell a customer everytime they take a sale.

Oh happy days.....

Note again not all retailers are guilty of this. There are always a few bad apples in the barrel. Shame on them!

WhiteWashMan

tbhm the only place i have ever seen a charge for using cc is when done over the phone or the internet. a booking fee or some such. and it is usually stated very clearly.
otherwise, in a shop, the price of the item will just have a cc cost associated into the price itself. the mark up on the item will incoperate this cost anyway.
so everything you buy will have a cc 'cost' on it. but it is very small. however, if you do feel the need to be up in arms about it, i assure you that carrying bucketfuls of cash about everywhere is a load of hassle

Nody

Holy Necromancy, I think you've might have gotten the record there.