In addition to the 2-3% credit card fee, there is also the fraud risk.

Consider this situation: the store owner gives you the cash so he can put someone's sale on your credit card. You take the cash, and file a charge-back 3 weeks later. The merchant is now out of money. You can claim that you never got the merchandise etc.

No store owner, no matter how friendly s/he is, will want to take this kind of risk.