redtop43

There was an article in the Wall Street Journal this morning - I believe wsj.com is by paid subscription only, so I don't think I can link to it. They interviewed a number of small retaliers, not a scientific study, but it seemed to conclude that (a) some small merchants might surcharge small purchases; (b) merchants were more likely to try to negotiate fees with MC/VS than to try to surcharge; (c) specialty/boutique retailers would be more likely to surcharge; (d) large chains would be constrained by state laws (including the four largest states, CA/TX/NY/FL) that prohibit surcharges.

mia

Indeed. Kroger's Pre-Tax Profit Margin is 1.8% and this is typical for grocers. In the 1980's analysts said that supermarkets would "never" accept cards because the margins are so thin. They worked it out, but it's easy to see that even a small fee reduction will be important in some retail categories

I don't disagree, however VISA has been working to raise awareness with offers that are available only to Signature cards, such as this one

https://www.fandango.com/visasignature/

People are remarkably efficient at understanding distinctions if they impact the pocketbook .

chelmkamp

This one?

Dadaluma83

A little disclaimer before my little rant here. Yes, I use a credit card for everything except small purchases, less than 10 dollars or so, and less than 10 dollars I pay good old fashioned cash money for that. I want to earn as much miles as possible so I run all my groceries, gas, cable bill, even rent on a credit card and pay in full every month. My cash flow isn't much of an issue so the float doesn't really benefit me so I could pay debit if I could but I do not because I want the rewards.

Was planning on cancelling my United explorer in another 6 months when the annual fee is due, opening up a sapphire preferred and get another signup bonus, and continue racking up miles for all my expenses that I have to pay anyway.

I don't work in retail or for a bank so I could care less about either of them. I just want my miles and I refuse to pay a surcharge for them. That is out of the question.

So if you ask me the retail and merchants are just straight up greedy. As far as I know particularly after the Durbin amendment merchants are free to take debit cards only, no credit. If a merchant doesn't want to pay the processing fees, yet still wants to accept electronic payments due to the increased sales volume then nothing is stopping them from doing pin debit only and refusing credit cards.

They know people with credit cards tend to spend more. They want their cake and eat it too. They want that increased sales volume but they do not want to pay for it.

So if nothing is stopping the merchants from only accepting cash/check/debit, why do they hate credit cards so much? Just don't accept them if the fees are that high. Just pure greed. Plain and simple.

Even saw a quote in an article, think it was from that convenience store group that rejected the settlement. They think interchange fees should be capped to nothing more than the bare minimum cost to process the transaction. Basically the banks should not be allowed any profit on the transaction.

I wonder if the shoe was on the other foot and there was a lawsuit where all merchants couldn't charge more than the bare minimum cost of breaking even on their products what they would think of that? Yeah, pure greed like I said.

Now if the worst happens and surcharges are imposed, particularly on high dollar transactions like my rent, airfare, hotels, etc I could get a debit card but I would be upset I wouldn't be earning any miles for it. I would open a second checking account and use the debit card for that one and opt out of overdraft, just move the money I needed from my main checking account to my debit card one, basically use it as a prepaid debit card but without the rediculous fees, and my main checking account stays seperate because having a debit card attached to all your money is just straight up risky and that is why I currently do not have a debit card, only an ATM card.


I hate the whole surcharge thing. I want my miles dangit!

Redhead

This is the biggest issue for me. Do they think that the card issuers and networks are in this for nothing. It is a business. Reducing price to cost is stupid and will hurt the overall business and economy.

cbn42

So let me get this straight: you want to get miles that you can redeem for free travel, you want merchants to pay for these miles, and you think they are greedy for not wanting to do so?

chelmkamp

At least in the case of Visa/MC, it's the issuers who offer the rewards, not the networks. While some of this may be paid through merchant fees (does anyone have any figures on this?), I suspect at least a portion of rewards are also paid for with other revenue sources for the issuer (i.e. interest charges from those who carry a balance). There is ample competition on the issuer end of the stick, which is the real source of all the perks high spend, low risk customers like most of us here on FT have come to love.

Surcharging is just a value transfer from network to merchant, so shouldn't have much effect on issuers who still need to provide perks to attract business, especially to those of us who don't carry a balance and therefore aren't fazed by low rates and balance transfer offers.

I suspect that rewards will become less valuable if we (the FT types) have to pay a surcharge to get them. Suddenly, cards with lower rewards levels but premium service and other perks may become more valuable (Amex Platinum) than the top rewards cards these days (Sapphire, PRG, SPG, etc).

msk6261

Retailers to charge credit card fees?

Under an agreement announced Friday, changes for rules on who pays the cc fees.

We may be back to the days (like at gas stations) there were 2 sets of pricing cash and credit. Fees, if charged should be listed on the receipt.

Unintended consequences are that these fees are from where the CC companies pay for the bonus programs.

http://www.bankrate.com/financing/cr...mm_PF_mainlink

koolr

Well, this may or may not affect the cc bonus program as big merchants may not impose the cc fees on the customers, and business will be as usual. Many small businesses also may not be able to charge more to their customers, otherwise, they might loose business. The argument about no debit card bonuses may not apply to cc as many many more customers use cc than debit cards, I think.

mia

A few posts containing opinions about the political origins of this settlement have been removed because they are off-topic for the Credit Card Programs forum. If your post is missing and you would like to have it exported to a new thread in Omni just click the triangular Alert icon in the lower left corner of this post, and it will be done.

mnscout

Well, here in NYC we are "in the days". All of them with an exception of Hess do have 2 sets of pricing. I don't know how they are doing that considering that NYS prohibits credit card surcharges, I guess they've gotten an exception for themselves.

mnscout

No matter what happens, credit cards aren't going anywhere. I just don't see it happen. Now, next question we should ask ourselves (who else, LOL) is what is going to happen to sign up bonuses. The way I see it, the mix of pissed off consumers and increased competition is likely to lead to better but deterred bonuses, not unlike the new Citi Premier scheme (30K for the first year and 30K for the second after meeting intense spending requirement). Thoughts?

JEFFJAGUAR

...because they call it a cash discount. It's tricky or just a matter of semantics depending on your view on this. These prorams first came in about 20 year ago and then only at a few brands of gas. At the time, what they did is the pump showed the credit card price as well as the large signs. They then used a chart that showed the "discount". Such practices were illegal in New York State where some consumer body ruled you had to charge the price o the pump but somehow they got around that.

Then the idea of having pumps capable of showing two different prices came into being (what they did before those came into being is they had certain islands for cash and certain islands for credit cards). Just as more and more statons began getting the new pumps, the oil companies dropped the programs as they found that motorists paing with a cc were more apt to fill it up but those paing cash were more apt to say$10 worth please and it stayed that way until the Durbin amendment about a year or so ago when surcharges were allowed except again because of the laws in the various states, they called it a discount for cash.

I would like to see somebody challenge these programs in the no surcharge states.

srdshelly

And if it leads the way in imposing credit card surcharges, I hope many will join me in walking away from it so it will become the second largest chain before long. I'm no big fan of Wal-Mart, but they're only a mile further away from me and if they don't have a surcharge and Kroger does, my grocery habits will change.

mnscout

I will certainly join you in walking away from any CC surcharge establishment up until the point when every establishment around me is doing the same thing. Then I'm afraid, I'll be forced to capitulate.