Originally Posted by MikeFromTokyo

The main reason is the commission charged by the credit card companies. This is often five percent, but can be as much as ten percent.

Some of the Japanese restaurants I frequent give me small discounts (usually around five or ten percent) in appreciation of my business and because I always pay in cash. In fact, the chef of one sushi restaurant with whom I am friendly told me that he is charged a ten percent commission by some credit card companies.