USA Merchants Reach Credit Card Surcharge Rights Agreement [Effective 1.27.2013]
#376
Join Date: Sep 2013
Posts: 401
So I did some research on this and found that Florida's courts struck it down sometime in 2015 as a violation of the first amendment. Apparently the AG is trying to get SCOTUS to take this case.
http://www.orlandosentinel.com/busin...706-story.html
EDIT: Looks like SCOTUS picked it up and it will be decided by the end of this current term ending in June.
http://www.reuters.com/article/us-us...-idUSKCN11Z1VO
http://www.orlandosentinel.com/busin...706-story.html
EDIT: Looks like SCOTUS picked it up and it will be decided by the end of this current term ending in June.
http://www.reuters.com/article/us-us...-idUSKCN11Z1VO
#377
Join Date: Oct 2013
Posts: 1,322
'Merchants want the right to reject some rewards credit cards'
WSJ article. Lede below, remainder at link behind paywall.
Large merchants including Amazon.com Inc., Target Corp. and Home Depot Inc. are pushing for the right to reject some rewards credit cards, which typically carry higher fees for merchants. They are likely to opt out of a roughly $6.2 billion settlement Visa Inc., Mastercard Inc. and several large banks recently reached with merchants and continue to make their case in court, according to people familiar with the matter.
The retailers are trying to end the card networks’ “honor all cards” rule, which requires merchants that accept Visa- or Mastercard-branded credit cards to take all of them. If merchants could pick and choose among Visa or Mastercard credit cards, those with the highest merchant fees—and most generous rewards—likely would be on the chopping block.
https://www.wsj.com/articles/shopper...hem-1537867801 via @WSJ
Large merchants including Amazon.com Inc., Target Corp. and Home Depot Inc. are pushing for the right to reject some rewards credit cards, which typically carry higher fees for merchants. They are likely to opt out of a roughly $6.2 billion settlement Visa Inc., Mastercard Inc. and several large banks recently reached with merchants and continue to make their case in court, according to people familiar with the matter.
The retailers are trying to end the card networks’ “honor all cards” rule, which requires merchants that accept Visa- or Mastercard-branded credit cards to take all of them. If merchants could pick and choose among Visa or Mastercard credit cards, those with the highest merchant fees—and most generous rewards—likely would be on the chopping block.
https://www.wsj.com/articles/shopper...hem-1537867801 via @WSJ
#378
Join Date: Apr 2005
Location: LAX
Programs: UA Silver, AA, WN, DL
Posts: 4,091
Not entirely unexpected... in the past few years the credit card rewards game has become more popular and it's a natural reaction for the businesses trying to minimize their transaction cost.
As a beneficiary of these credit card rewards, I hope that this won't become reality, but I can sympathize with businesses saying enough is enough.
As a beneficiary of these credit card rewards, I hope that this won't become reality, but I can sympathize with businesses saying enough is enough.
#380
Join Date: Oct 2014
Programs: All of them
Posts: 1,664
That's right, and we're to believe it's for our own good and will lead to lower prices. The transaction cost is already built into the price, so this is a pure money grab and a lie. I feel especially bad for Amazon. How will they ever make ends meet with such high interchange fees?
#381
Suspended
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 50,262
Anybody who thinks that those miles/points and other perks from a CC don't come without a cost is simply naive.
Under the current vendor agreements, the extra costs are spread over all card users and all sales. Effectively people with a plain CC which has no special features are subsidizing the higher-end cards.
That won't last. Whether it ends in this go around or over a few years is anyone's guess. But, the business model is not sustainable. It will be up to the card issuers to determine whether they will bear the additional costs for HVC's or simply abandon the concept of a reward card providing other than some minimal benefit.
Under the current vendor agreements, the extra costs are spread over all card users and all sales. Effectively people with a plain CC which has no special features are subsidizing the higher-end cards.
That won't last. Whether it ends in this go around or over a few years is anyone's guess. But, the business model is not sustainable. It will be up to the card issuers to determine whether they will bear the additional costs for HVC's or simply abandon the concept of a reward card providing other than some minimal benefit.
#382
Join Date: Dec 2013
Posts: 3,509
Anybody who thinks that those miles/points and other perks from a CC don't come without a cost is simply naive.
Under the current vendor agreements, the extra costs are spread over all card users and all sales. Effectively people with a plain CC which has no special features are subsidizing the higher-end cards.
That won't last. Whether it ends in this go around or over a few years is anyone's guess. But, the business model is not sustainable. It will be up to the card issuers to determine whether they will bear the additional costs for HVC's or simply abandon the concept of a reward card providing other than some minimal benefit.
Under the current vendor agreements, the extra costs are spread over all card users and all sales. Effectively people with a plain CC which has no special features are subsidizing the higher-end cards.
That won't last. Whether it ends in this go around or over a few years is anyone's guess. But, the business model is not sustainable. It will be up to the card issuers to determine whether they will bear the additional costs for HVC's or simply abandon the concept of a reward card providing other than some minimal benefit.
To be honest, I think it just merchants trying to cheap out on not wanting to pay CC swipe fees. The merchant should be negotiating with Visa, MC, AXP, and Discover on lower swipe fees. Credit cards accessibility are a part of business especially if the merchant sells high value items.
#384
Join Date: Jul 2017
Programs: UR, Marriott, AA, WN, Chick Fil A Red
Posts: 182
That's right, and we're to believe it's for our own good and will lead to lower prices. The transaction cost is already built into the price, so this is a pure money grab and a lie. I feel especially bad for Amazon. How will they ever make ends meet with such high interchange fees?
#385
Join Date: Dec 2017
Posts: 463
This reminds me of buying gasoline. The station couldn't charge you extra for using a credit card, but they could give you a discount for paying in cash. I could see merchants saying this is the price, but you get a discount if you use a no frills credit card.
#386
Join Date: Oct 2014
Programs: All of them
Posts: 1,664
With Debit, there's also the difference that banks effectively made interchange fees for giving out our own money to the merchant, straight from our bank account. At least with credit transaction they take on risk and provide some useful value that could justify the fees.
#387
Join Date: Jul 2017
Programs: UR, Marriott, AA, WN, Chick Fil A Red
Posts: 182
I would say you're mostly right, but where would the Debit -> MO cycle be now without the cheap debit interchange fees? We may not have that option now.
With Debit, there's also the difference that banks effectively made interchange fees for giving out our own money to the merchant, straight from our bank account. At least with credit transaction they take on risk and provide some useful value that could justify the fees.
With Debit, there's also the difference that banks effectively made interchange fees for giving out our own money to the merchant, straight from our bank account. At least with credit transaction they take on risk and provide some useful value that could justify the fees.
#388
FlyerTalk Evangelist
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,508
Sorry for resurrecting an old thread but it appears that the settlement mentioned in OP is back on. While the new settlement offers a bit more money than the previous one, some larger retailers are still opting out anyway.
Additionally, stuff like the "honor all cards" rule still hasn't been resolved with this settlement. That rule, if ultimately dropped, would likely do as much damage to the miles and points game as a EU-style interchange cap would (IMO, anyway).
Additionally, stuff like the "honor all cards" rule still hasn't been resolved with this settlement. That rule, if ultimately dropped, would likely do as much damage to the miles and points game as a EU-style interchange cap would (IMO, anyway).
#389
Join Date: Jul 2014
Location: Western US
Programs: Costco Executive Member, Amazon Optimus Prime
Posts: 1,251
How would retailers practically administer a NON 'honor all cards' world anyways? Would merchants really be able to check each card before ringing up a sale to determine if its a valid payment channel? Would they really be happy with irate customers just leaving stuff at the cashier if declined and marching out in a huff?
I could see maybe a website telling people that cards stored on it are no longer eligible - no different than vendors saying 'no Amex' - but I don't think ordinary folks will get the nuances between all the Visa variants (nor should they....)
I could see maybe a website telling people that cards stored on it are no longer eligible - no different than vendors saying 'no Amex' - but I don't think ordinary folks will get the nuances between all the Visa variants (nor should they....)
#390
Join Date: Mar 2017
Programs: HHonors, TrueBlue, Delta SkyMiles, Hyatt Discoverist, Starwood Preferred Guest, American Airlines.
Posts: 2,035
How would retailers practically administer a NON 'honor all cards' world anyways? Would merchants really be able to check each card before ringing up a sale to determine if its a valid payment channel? Would they really be happy with irate customers just leaving stuff at the cashier if declined and marching out in a huff?
I could see maybe a website telling people that cards stored on it are no longer eligible - no different than vendors saying 'no Amex' - but I don't think ordinary folks will get the nuances between all the Visa variants (nor should they....)
I could see maybe a website telling people that cards stored on it are no longer eligible - no different than vendors saying 'no Amex' - but I don't think ordinary folks will get the nuances between all the Visa variants (nor should they....)
Problem 1:
The merchants also claimed that the card companies unfairly interfered with them from encouraging customers to use less-expensive forms of payment such as lower-cost cards, cash and checks.
Maybe a bunch of workers from Target should stand in the middle of Walmart and advertise their business there so they can steal customers... Kinda the same thing merchants want to do. "Oh, use a Visa and we'll give you a free candy bar with your purchase." Well no, because you're putting AMEX , MasterCard, and Discover at a disadvantage now.
Problem 2:
The lawsuit was filed by more than 12 million merchants, who alleged that Visa, MasterCard, and major credit card issuers were engaged in a conspiracy to fix interchange fees, also known as swipe fees.
The merchants will whine and whine until they can suck everyone else dry of their money but themselves... So in other words, they'll whine forever because they "have to" pay employee, benefits, and credit card fees. If credit card fees were ever eliminated, they'd move on to whining about how much health insurance benefits cost, and how employees need to make rock bottom wages.