I'm torn because I recognize that my rewards aren't free and that swipe fees exist, but it's aggravating to have surcharges on a few grounds. Honestly, I am more patient with small businesses that choose to do it because they don't have the same leverage to negotiate better swipe fees like the Walmarts and Home Depot's of the world.

The best bakery (for sweets) in my town is locally owned. For many years, cash and check only. They even got an ATM for many years over accepting cards! I respected the hustle because their products were so good that I didn't begrudge their decision to choose not to take cards. They started surcharging and it put a sour taste in my mouth. They stated on a handwritten sign that it was a fee "required by the card companies". Breaking the rules, they also surcharged debit (and still do).

Similarly, a restaurant I was at on the Jersey shore last year charged a 3% surcharge on credit... while charging $20 for a burger and $10 cocktails. A donut shop (also Jersey Shore) surcharged credit/debit (breaking the rules) AND discounted cash transactions on their POS, which might be the worst policy I've seen. I'm not opposed to cash discounts, but I consider the cash discount/card surcharge policy to be the worst possible option, as it renders any list price as totally meaningless without a conversion.

A surcharge feels...intellectually dishonest? You want the benefits of a reduced average checkout time, electronic transmission of funds (not risking employee or other theft), convenience for the customer (that may affect how often they choose to be a patient of a given merchant, or if its a deciding factor), that people on average spend more on credit cards... but you don't want to pay the price for all of those benefits. Aggravating it is that complaining to the networks about it is absolutely useless. You get some generic note that they've reminded the acquirer to remind the merchant of the rules and NOTHING changes. Visa/MC/etc. must be afraid of the retailers gaining more ground at this point because they will not enforce their own rules and instead hope that the messaging on how you'll scare away customers will work.

Complicating that is that card processing isn't free and particularly for cash heavy businesses in the NY area, a cash price is often inclusive of tax (bagels, pizza) where a debit/credit price isn't (hello 8.375% sales tax in my area). You get that $1.25 bagel cash it's $1.25. You put it on a card, that's $1.25 + 10 cents tax.

I will say that the examples I've cited are merchants that have (in my opinion) correctly calculated that they are in a good enough niche where people will either divert to a cheaper method of payment or tolerate the surcharge. The local bakery is awesome, hands down. The restaurant with a $20 burger makes a burger worth paying twenty bucks for. The donut shop makes phenomenal donuts. Yes, you can buy donuts elsewhere, but not ones of the same quality.

If Amazon/Walmart/Home Depot start surcharging cards - I'll buy elsewhere. I can get equivalent goods and services elsewhere.

I wonder how many people tolerate the surcharge versus pay it due to not carrying much cash. Certainly a 4% surcharge such as in my example removes any incentive for me to use a card on the purchase since the rewards aren't worth that much. I guess the Chase Sapphire Reserve with Pay Yourself Back would be more or less a wash at 4.5%, but I'm still frustrated that the merchant is pocketing some of that.

I'd be less inclined to order extra items versus if I could use a card without a surcharge. I don't know if others go through the same thought process, but this is why McDonald's decided to start accepting credit cards. McDonald's discovered customers using a credit card spent more than customers paying cash. This is why some personal finance guides recommend spending cash to better budgeting.

You want opportunities to upsell and to have the customers reading the menu from left to right.

A 40 cent/gallon differential for card use has to be the biggest I've ever seen at a gas station. As one can imagine, people aren't too happy about that to the point where the former city attorney's recommending that people file complaints with the city.

BTW, 40c/gallon extra at current gas prices is way more than the 4% allowed by current card network rules. Interestingly, the 10c/gallon extra that's more the norm around here no longer violates that particular rule--at least as long as gas prices stay where they are, anyway.

Circa 2013/2014 such surcharging was incredibly common in NY state. Gas stations similarly got emboldened with the road sign practices. The feedback at the time (which was on the grounds that the retailer settlement/courts hadn't struck down the "no surcharge" provisions of NY law, but had settled that cash discounts were allowable) from the Attorney General's office was that if both prices were posted conspicuously (both at the pump AND on the road signage), that it was allowed as a cash discount. If they used the cash price to lure motorists in, then popped a higher one at the pump - a no-go, because it was a misleading list price not documenting the cash discount clearly. Almost all stations complied with this at the time by doing a cash regular gas/credit regular gas/diesel prices on the road signs. Over the years as the road sign AND pump signs were switched to digital signage, the digital signage at the pumps was often an equal lengths alternate of the cash/credit prices.

Once surcharging became bona fide legal by surcharging being permitted they got bolder on this with the road signs, but even then the road signs generally did a 50/50 split of cash price/credit price across the grades listed, with a more conspicuous cash/credit disclaimer (larger font)

What this other station in Cali is trying to do with the relatively hidden prices, small cash disclaimer, and displaying of the cash price for 2x as long as the credit is a dark pattern, is grossly misleading, and disgusting. I don't think Sinclair will want the bad PR and they will lean on the owner to change their policy.

Card surcharges are becoming so prevalent for me. About 50% of my in-person small business activity are from merchants that add such fees. The platforms like Clover and other make it so easy for the stores to have auto-added. About 3% is what I commonly see (and is feasible to be the net interchange fee in those cases). A bit less at 2% at many salons I see (usually a flat fee added).

I cam usually cover the cost with a 2-4% rebate card, but it is a problem that causes friction.

What is worse is on April 1, many non-billion dollar transaction merchants will see fees increase (all of the non-Amazon/Target/Walmart/etc.). I think it is about a 10% increase in general.

I think it is more nuanced. Some small merchants should see reductions:

https://www.wsj.com/articles/visa-ma...es-11646743166

Couple of PYMNTS.com articles on this topic in the last month.

This article suggests the overwhelming majority of people are now checking their receipts for surcharges. Another article suggests that 56% of people are "likely to switch merchants" if they surcharge. Older generations are more likely to switch if asked about the hypothetical of being asked to pay one. Millennials are more likely to switch if they actually have paid one. Income correlates upward with that.

As I said earlier, I think there's probably patience by merchant category and size. A highly sought local eatery is probably likely to have people bear the surcharge, whereas a grocery store or hardware store seen as interchangeable with competitors, people may not. However, the first article disagrees with this:

However, the problem with polls/surveys is that even with the best intentions, what people say and what they actually do may be different. Time will tell.

Mrs. Majuki and I ate at Dametra Cafe in Carmel-By-The-Sea for dinner last night. I noticed a sign outside the restaurant that said, "As an incentive to our customers, we provide 3.5% Cash Discount incentive on cash and store branded gift card purchases."

The menu said, "Due to the challenges that our industry is facing during these difficult times, all credit card transactions will have 3.5% non-cash adjustment fee."

Finally, the receipt indicated a "Pay with Cash" and "Pay with CC" price, itemized the fee, and indicated, "A 3.5% non-cash adjust fee will be added to all cc transactions."

It was a casual observation, but I didn't see anyone paying with cash during our time there. I feel like these surcharges are the restaurant equivalent of the resort fee where the restaurant doesn't want to raise prices on the menu, but in practice there's no convenient or practical way of avoiding the fee. Yes, I could carry sufficient cash for such an event, but then I'm comparing prices to the cash I have on hand.

I imagine that cafe attracts tourists rather than repeat clientele, so perhaps it may be a different situation.

In my town, I see lots of people paying with cash at places that have a surcharge, but I don't live in a tourist destination.

But at any rate, I don't think this is really like a resort fee. Resort fees are mandatory, a credit card surcharge is easily avoided with a bit of planning.

This was not our first time at this restaurant, but it would be interesting to see among those restaurants that levy a surcharge what percentage are tourist focused versus local / repeat customer focused.

I disagree that it's not like a resort fee. Resort fees came about because hotels wanted to advertise lower rates on online booking sites compared to nearby hotels. This restaurant's cited reason was due to operational challenges. My guess is many customers pay with non-cash payments, so a surcharge is a backdoor way to offset costs without raising menu prices. My choices as a customer are to go to a restaurant that doesn't charge a surcharge for card payments, like selecting a hotel that doesn't charge a resort fee, or paying cash. I would argue as I said in my earlier post that paying cash may be impractical or inconvenient. How much cash do I carry? If I need more do I go to an ATM? Do I limit what we order off of the menu? In practical terms, it's likely easier to do a card payment if choosing to eat at that restaurant.

There is a payment processor who is going around to small businesses selling them these terminals and basically telling them if you put our terminal in it will be free to accept cards, no more merchant fees, because we do this thing where we say all transactions get a 3.5% service fee then if you pay cash you can save that fee. So that 3.5% fee the customer pays, you pass it on to the customer, and we pay you 100% of the amount of your sale.

Personally I will not support a business that surcharges unless I feel they are actually providing a very good price for whatever they are selling. I am finding the small restaurants that surcharge are already high priced. I have seen some cashless businesses surcharge too, and my point to them is- the customer cannot avoid the surcharge so what are you doing? Just increase your price... since you know everyone is paying by card. One of them told me they do not surcharge a gift card user. But if they are cashless, whoever bought that gift card paid their surcharge...

Really if it is such an issue I think the business should just convert to cash only and see how that works out for them.

I expect to see more of this. And I expect to see more small businesses fail because of it. They just need to work the cost of processing the card into their prices.

I have walked from multiple businesses or purchased less from multiple businesses when I learn at the point of sale they have a surcharge.

This might be that payment processor. The sign outside had all four payment network logos and had a heading that said, "Pay with cash & save!"

Yes, the signs they use and language will vary somewhat by state.

For a while in California they were marketing their product but only applying the fee to debit card users (with a PIN), not credit card users. So they'd charge the retailer that 3.5% processing fee for credit cards still and many retailers found they could get a better deal from other processors. Something must have changed with CA Law or interpretation of CA Law because I have noticed they are surcharging credit cards now, and more merchants seem to be signing up with them. I can see how it is an attractive marketing program for the small merchant who is tired of credit card fees.

But that's exactly the difference. The hotel resort fees are just flat out arbitrary amounts that represent the amount they want to deceive people about the rate in their advertisements. The credit surcharges are for a specific cost and are -- at least so far -- tied to the actual incurring of that cost and more or less to the actual amount of that cost.

If their credit surcharges started ballooning out of any relation to the actual credit card fees to something like 10% surcharges then that might be somewhat like the resort fees, especially if they *also* started imposing a cash handling surcharge which I suspect is exactly where that would lead....

Fwiw a lot of people would be entirely ok with resort fees if they were only inflated prices for use of the actual resort benefits. If you could choose not to pay the resort fee and forgo use of the pool, spa, etc. You don't hear many people complaining about the inflated prices for breakfast when they know they could choose to just eat elsewhere even amongst people who end up paying it.

California's anti-surcharge law, IIRC, was similar to the one from New York (?) that was struck down by SCOTUS. Hence why that stopped being enforced as soon as that happened.

BTW, it looks like Canadian merchants are going to get the right to surcharge too: https://www.cbc.ca/news/business/cre...fees-1.6470952. It sounds like there was a similar interchange fee lawsuit up there as the one that happened here a decade ago that triggered the change.

interestingly enough, was in SF over the weekend and was at a cafe where they were surcharging both credit and debit cards. My understanding was they weren’t allowed to surcharge debit cards. I think they were manually putting it in, because the Cc terminal showed the price with the surcharge, and I when I realized I had enough cash, and she saw me paying, she typed something else into the non-cc device and gave me the lower cost. As a point of comparison, at a locally owned ME grocery store near home, they surcharge cards, the terminal shows the amount of charge, then asks you to consent to the $X card fee. If you decline, it won’t let the transaction proceed and you can pay the cashier in cash.

as for Canada, forget the details exactly, but there was a lawsuit many years ago on acceptance of ‘premium’ cards, which got higher swipe fees. Some merchants, particularly small businesses had signs saying they would not accept the equivalent of todays Visa ‘Infinite’ cards because they didn’t want to pay the higher fees. CC companies sued, forcing merchants to either take all a brands cards if they wanted to take any. I think merchants got the right to charge fees though for taking them, and I think they asked, but don’t remember if they got the ability to, charge higher fees based on whether it was a ‘regular’ or ‘premium’ card.

Yeah, surcharging both card types is pretty common because debit cards typically run over Visa or MC at a lot of smaller places. From the merchant's perspective, everything is a credit card. Not the correct view, of course, but I get it.

Maybe if mandatory debit routing (e.g. like Interac in Canada) were a thing, places would actually surcharge only credit cards like they're supposed to.

There used to be one of the restaurants at Great Mall that had a sign stating that there were different surcharges for debit, standard credit cards, rewards credit cards, and premium credit cards. I never ate there while it was open, and I don't know how they would distinguish among the card types.

The merchant software is supposed to figure out the fee from the BIN automatically and line item on the receipt. Elavon is one that advertised as such.

Remember, the surcharge must be listed as a line item or it should be reported to the network. Merchants have to follow the rules if they want to do this nonsense.

I dont know the exact specifics, but the numbers on your CC mean more than you might think. There are various of the digits that identify various things, for example, Visas start with 4, Amex 3, MC 5, there are others that identify the issuer, type of card, check digit, etc. when the card is run, trivial to identify what kind and automatically charge the appropriate fee.

I will emphasize your information that this business went out of business...

They probably just looked at the card and made an assumption.

I again emphasize that this business went out of business...

Thousands of restaurants go out of business every year, most of which don't have any sort of card surcharges. I don't think you can attribute the failure to any particular factor.

I was just glancing at some of the latest interchange fee schedules. Now, the merchant processor typically adds some fees on-top, but some of the categories I found of interest...

https://usa.visa.com/content/dam/VCO...ement-fees.pdf
https://www.mastercard.us/content/da...apr22-2022.pdf

Fuel: All MC/Visa credit card types, No more than $.90 to $1.10 max per credit transaction. It makes the argument that gas stations with split pricing for cards versus cash are profiting on the price difference in many cases. I am unsure if that is allowed.

A number of transaction types including taxi/rideshare and restaurants no longer have a per transaction charge to support no need for minimum charge.

If you use use credit with charities, Visa is better than Mastercard. Mastercard is trying to encourage utilities to take card and put a small flat fee lower than processing a check or other payment methods. That means the over on the rebates/points is coming from the issuer. We still don't see many utilities taking credit.

Gaming is also getting a very low rate, but I suspect many issuers will flag it as cash advance that are not rebate eligible.

It is a reminder than business folks should try to not take a flat rate for cards, but should try to get the rate per network plus whatever plus on top for their acquirer/merchant processor.

This can be complicated by the fact some processors also provide the POS system (e.g. Square). Though at least in Square's case, you can negotiate fees if you have enough volume.

While this isn't strictly surcharging in the US, it has implications for US credit card holders. This was at Sunflower Taiwanese Gourmet in Sydney. I don't know how they can tell between cards, and this likely goes against the card acceptance agreement. My sister-in-law paid with her local card, so I didn't get an opportunity to test this:

https://cimg0.ibsrv.net/gimg/www.fly...f52684c99e.jpg

Does "international card" refer only to cards issued by foreign banks, or any card that runs on a foreign network, such as Visa and Mastercard? It is possible that "local card" refers only to EFTPOS, although I've never heard of a surcharge for that.

How this 'surcharge' will be applied if one pays with Apple Pay?

I saw another establishment where V/MC were 1%, Amex was 1.5%, and UnionPay was 2%. I thought UnionPay typically had lower fees.

Australia is another special for surcharges. All hotels there pretty much surcharges if you use a card, even cobranded. I took cash from ATM to pay my bill. If the surcharge is done by the merchant by looking at the card, you are right that there may be ways to skirt it with mobile tap to pay.

I've had similar international card discrimination for extra surcharges in Canada (Niagara Falls). I do believe many merchant agreements do charge more for overseas cards. So, as long as surcharging is allowed, then...

On UP, if it is ran over Discover, it would be at the Discover rate which can be higher except for larger merchants. If a merchant is paying the same rate for all cards, they are likely overpaying for some transactions.

I've not seen a higher surcharge applied on the basis of my card. I agree that mobile payments would be an easy way to dodge that. The going rate for surcharges here seems to be 1.5%, which I remember being the case the last time I was here in 2019. It seems that most have just accepted surcharges. Rarely have I seen cash exchanged at restaurants, cafes, and stores. I get 3% on dining with my Chase Sapphire Reserve and 6x on my Marriott Amex, so that still beats the surcharge.

I didn't think Discover was accepted here (outside of some larger merchants), so CUP might be using its own or a different network.

What's interesting is that surcharging is sort of a DCC style practice in Australia where the merchant will enter the amount before the surcharge, but then the surcharge applies after presenting the payment method. Here is an example of the typical setup:

https://i.imgur.com/fT7i8PT.mp4

With merchants applying surcharges in the US, I've always seen the amount at the prompt before presenting the payment card reflect the surcharge.

I know that Clover devices will show the amount and then "+ X surcharge" type wording on the insert/tap/swipe screen if the merchant sets one up. I've only seen that once so far, though.

I have seen two Square terminals here, but neither place levied a surcharge. I've mostly seen card payments at merchants, so people have come to accept the surcharges it seems. I imagine it's like at gas stations in the US where there's a different cash and credit price but it doesn't materially alter behavior. Since the surcharges are mostly 1.5% or lower and I'm mostly having category bonus spend, I'm still coming out ahead relative to cash.

Magoo's Place (restaurant) in Alpine, TX. added a surcharge with no warning. I handed a credit card and received a receipt that included a surcharge. (I believe it was 4%, but I'm not sure.)

I got a receipt from a Crocs store and it had something I had never seen printed before. I was using a WEMC with really no special benefits (no AF), and the receipt printed a lot of internal lines. For both card type and payment variant headers, it said "mcsuperpremiumcredit". Now, the only reason this is important because it would dictate potentially a different discount fee (not always). Of course, it might be interesting if I used a lower tier card to see what it would say or even signature/non-PIN debit, but that was not feasible for this particular purchase.

So, it is definitely possible for a POS to instantly segment a payment type no matter how it is presented for the purpose of surcharges. It might require an online process, but I am not so sure about that as it appears any online process response came later on the receipt.

I've only seen the surcharge in restaurants and convenience shops in NY. In the later, after they ring it up, I just cancel the order since I'm not paying the 4% CC fee and I am not carrying cash. I normally tip 20% in the restaurant, however, I've now discounted it to 16% due to the fee. It evens out in the end. Some may not agree with this, and that's fine, but this is BS that they are now passing these fees on to us. I still do not pass on the fees. It's part of the cost of business. When more people start doing this, things may change.

Outside certain regions, notably California, and some places back east, the practice of a separate price for cash and credit at gas stations is rare.

Also in California it is a bit fuzzy but debit cards should be getting the cash price... but usually don't... unless you are in an area where someone raised a stink about it.

There are plenty of regions outside the US where "any discount for cash?" will get you a nice discount but .... that's not credit card fees they're saving on....

It usually clearly says "credit/debit" and "cash". Sometimes their own branded credit cards get the cash price. Since this is posted as a cash discount and not a surcharge, I don't think the networks' rules about surcharging are applicable. This was common practice even back when surcharging was banned by both the card networks and California law.

Yes, I remember seeing it prominently when I moved to California for the first time.