mia

http://online.wsj.com/article/SB1000...DDLETopStories

aarif1

Well, that would suck.

I'd be okay with a minimum amount to use a credit card, but a fee to use credit card... I don't know what I would do.

ChinaShrek

This means many people will start paying with cash. Even for on-line transactions, people will use their checking account or PayPal. Come to think of it, for on-line transactions, PayPal may have hit a winner. Why would someone pay 2-3% on airline tickets if they used a credit card when PayPal would be free (and safer than giving out checking account information). I would also use cash and show up a travel agencies to pay for tickets with cash. Brick and mortar may be back for travel.

kebosabi

The key here is may, which implies it's an optional choice for merchants. Whether a merchant or not does it depends on each merchant.

If the invisible hand of market forces plays out, my best guess is that little will change in the long run.

If Burger King starts charging 2-3% additional for using a credit card at the counter in order to pass along the cost to the consumer, but if McDonald's decides to eat up the 2-3% cost as a price of doing business, that's competition going on.

I'm sure the King would lose a lot of Whopper loyalists and changing their favorite to becoming Ronald's Big Macs fans.

wcj

I live in hickville USA and this has been happening at many small businesses. A couple of local carry outs and my favorite ice cream shop all charge $.50 to use a cc. I just choose not to return as I doubt any comment by me would be fruitful. Out here, they just really don't care to much about what is proper under the law.

Dadaluma83

If I was being charged extra for a credit card, I would never do business with that establishment again and I would make sure to let the manager know why I am not returning. It would be pointless to tell the cashiers or other front line employees, they don't care, especially if paid hourly, but the manager who has some control over policy will care.

I will never get a debit card due to fraud concerns. I want to stay away from checks if at all possible.

So if this happened I would play a wait and see game. I wouldn't immediately cancel my rewards cards. I would like to think most merchants wouldn't impose the surcharge just because they would lose so much business especially if their competitors didn't follow suit.

If they colluded with each other and all imposed surcharges, I would pay exclusively in cash, or paypal for online transactions, or in person at businesses that accept paypal or even those new apps where you can supposedly just pay with your smartphone. Google wallet or something I think it is called. I would keep one credit card for places where it was absolutely necessary like a rental car, or an emergency.


I have no problem with merchants requireing a minimum purchase to use a credit card, but imposing a surcharge is just wrong and I would like to think the majority of the American public would cry foul over something like this. People are already getting sick of fees for everything in airlines, banking, and a fee to use their credit card would be met with the same rage as when bank of america tried the 5 dollar a month debit card fee.

So I am not too worried yet.

freeflyin

+1

Dr_wanderlust

if a merchant can't figure out how to make a profit when dealing with a tax deductible cost of doing business it probably has a flaw in its business plan.

cbn42

There are many countries (Australia, some parts of Europe, for example) where this is the norm. You can use a debit card (EFTPOS or whatever it's called) and pay nothing extra, because debit cards are cheap to process. If you want special return protections and frequent flier miles, you need to pay for them.

If this happens, I don't think there will be massive changes. Credit card companies may actually reduce their interchange fees in order to avoid losing market share to other forms of payment. Rewards programs may get weaker, as they did for debit cards after the Durbin amendment. Paypal may get more popular. But people are not going to start carrying wads of cash or checkbooks around again.

OverThereTooMuch

I guess the fact that there was pending litigation explains why they haven't been enforcing this policy for a long time.

travelinfoo

Hmm... I can see this going the way of airline baggage fees. It may start initially as passing on the CC fees but once the companies/stores get a taste for the extra money they can generate, esp if VISA and MC lower their own fees, they'll keep the surcharges. I can see the stores keeping the customer CC surcharges the same even if the CC lower their fee, in essence increasing the stores' profit margins. If nearly all the big guys (chains, online shops, etc) impose the fee, like the baggage fee, it'll be a hated but accepted routine price of commerce and won't be eliminated later. Like the baggage fee, I can see nearly all adding the surcharges, so no comparison shopping there.

Paying in cash is not a disincentive to the stores. It's easier to hide cash transactions from the books, so they end up paying less taxes. Another hit to the consumer since that means lower tax revenue from commerce

Unless you use the bank acct option, PayPal also uses CC for payment. I'm sure any PayPal surcharge will be passed on to the consumer.

Redhead

The first time this happens, I will leave my purchases there and call the manager over to explain why I am not making my purchase and go to a store without the surcharge.

chelmkamp

Or pay in the smallest denominations of cash and coin that you can for that particular transaction! For example stand there while the store manager takes your payment for a $2000 TV in ones and fives.

These "poor" merchants need to realize that there's also a real cost to doing business by cash/coin. Time is money, and it takes a long time to count bills and coins. Not to mention a higher possibility for loss, employee theft, etc.

cbn42

The merchants are not obligated to accept 2000 $1 bills for payment. It is not a debt (unlike a restaurant) so they don't have to accept all legal tender.

Yes, you can take your business somewhere else, but depending on how many businesses are surcharging, you may be greatly restricting your options and the remaining businesses are likely to have higher prices overall.

travelinfoo

I suspect you may not have much choice. If some of the larger chains (and amazon) add on the surcharge, i think other stores will quickly follow. Anything to increase profits which means increasing surcharges. Like airline price increases, often times one will step forward to see if the others will follow. Many times they do and the increase becomes a reality.

I think the stores that don't add the surcharge will increase their base price. This whole adding the surcharge was done in the guise of benefiting the consumer, but i think in reality it is a way for stores to increase their profits. The majority of commerce is now done via CC & debit cards. Any savings from lower CC fees to stores will just be pocketed and not passed on, like a lot of airline government fees. When those expired, the airlines did not DECREASE their prices to reflect the fee's disappearance. Instead, they left their prices the same, in essence increasing the price by the amount of the expired fee, instead of passing on the savings. I think this is an all-around losing situation for the consumer.