Credit Card Fees passed through from merchant

[Anonymous]

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Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

Because they get charged 3% of the charge.

okay, so there are so many people saying the merchants are just passing along their charges. THIS ISN"T TRUE. merchants aren't charged that much. A few years ago, the fees were reduced and the merchants never lowered their fees when "passing them on." They kept the higher amount to charge customers. They are making money off the fees they are charging you.

Keep in mind that with credit cards, merchants are guaranteed the money. If the customer doesn't pay the credit card bill, the bank eats that cost. If there's fraud, the bank eats that cost. If you pay by check, and there's no money, the merchant eats that cost. So, merchants should NOT be passing any of those fees to you - they are guaranteed money if you pay by credit card. Something they should pay for.

Have you ever heard of a chargeback? The bank does not eat that cost.

+1 Also, the PP saying there are lower merchant fees now isn't right. I own a business that accepts credit cards and the fees vary based on whether it's a reward card vs. regular credit card vs. debit card. However, you aren't permitted to charge a processing fee for debit cards, so those don't really count.

Discover and American Express are the absolute worst. The fees they charge the merchant are very high.

The merchant eats the chargeback because in those cases, the merchant messed up. This is a consumer protection.

For example—I order an item on an online platform and it never arrives. Neither the platform nor seller care and take my money. I contest with my credit card company, who protects me and doesn’t make me pay after I provide clear evidence of malfeasance.

And we, as consumers benefit from 1) the fraud protection and 2) the faith that the issuing bank has in the consumer being able to pay (eventually). Also, so many other fraud protections, cyber, rewards, etc. That costs something to operate. Way cheaper than the markup on uber or DoorDash!

Do the credit card companies really collect from merchants though?

That's their main source of income and why they give out credit cards. Every transaction makes the banks money.

[Anonymous]

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Anonymous wrote:But isn't there a cost to these companies for using cash? They have to pay Brinks trucks and such? And isn't there a cost to them for managing echecks?

Cash payments are by far the biggest headache for a business to handle vs other methods. Our back office process for handling electronically deposited checks is nearly identical to handling credit card sales. The difference is it costs us $200 a month to run a million in checks vs ~$22K for that same million in cards. We started offering a discount for payments by check in the fall of 2023 for our big jobs. Factoring in the discount it ended up being just over $100K in found money in 2024. Its a double edged sword though; I used to be able to easily charge $10 Million in expenses on our Business Amex any given year. I couldn't tell you the last time I paid to travel or eat out. More and more our vendors are going the same way either introducing a fee for credit card payments or juicing up the discount terms.

This is what merchants should be doing.

They always have offered a "discount" for cash, check, etc.
It's not a "discount", that's the marketing gimmick term. It's just that they have to charge more for CC transactions, because the banks take a cut.

[Anonymous]

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Anonymous wrote:My issue with the credit card processing fees are the businesses who are cashless. There is no option but to pay the extra percent plus transaction fee.

Use a debit card or simply find another business to frequent.

Not always an option, but you knew that when you wrote that snark. Have a nice day.

NP. Are there that many cashless businesses? The only places I know of are coffee houses, and yes, I do frequent other establishments because I think it’s obnoxious.

[Anonymous]

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Anonymous wrote:Credit card fees for vendors usually include a flat fee and a percentage of the sale.

This. They are only passing on the fee that they pay. Your issue is with the credit card companies, not the vendor.

Well, the credit card company is providing a service to the vendor and the vendor is supposed to pay for that service. But like anything B2B, it gets passed on to C.

[Anonymous]

Companies have always had to pay a transaction percentage to Visa, MC, and AMEX. Now they’re just getting greedy and passing that cost onto consumers. It’s no different than other junk fees: mandatory service charges at restaurants, destination and resort fees at hotels, and now a BS climate change fee soon to be charged by hotels in Hawaii.

Just need to respond in kind with equal deception and fraud. DH and I just checked out of a hotel in Hawaii and dumped some quick setting concrete down the sinks and toilets in one of the hotel’s bathrooms. We also stole some furniture from one of the ground-level lanais. That squares us as far as I concerned. FAFO, you greedy hotels and restaurants….

[Anonymous]

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

I hate it and I’m known at my kids’ soccer club for dropping off checks because their platform charges % fees for both credit cards and bank transfers. But it doesn’t make sense to have a flat fee for credit card transactions. For those of us who pay off credit cards immediately, the fees are annoying. But the credit card companies’ risk depends on the amount of the transaction - it’s riskier for them to lend $10k than $5, so that is the fee.

Can you use a debit card? There shouldn’t be a fee because you are not borrowing money. And I believe it is illegal to charge fees on debit cards but I could be wrong there.

[Anonymous]

Most credit cards give you back 1-2% of what you spend in cash or other type of rewards. If you really want to use a credit card with a merchant that passes fees on to you, at least use a 2% reward card.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My issue with the credit card processing fees are the businesses who are cashless. There is no option but to pay the extra percent plus transaction fee.

Use a debit card or simply find another business to frequent.

Not always an option, but you knew that when you wrote that snark. Have a nice day.

NP. Are there that many cashless businesses? The only places I know of are coffee houses, and yes, I do frequent other establishments because I think it’s obnoxious.

Yes there are many cashless businesses. We were transitioning that way before covid hit. Covid spend the process along. It's also for the safety of employees. Much less likely to be robbed if there is no cash in a coffee shop---the robbers are not taking coffee equipment and selling it.
Why do you think Pot shops are constantly the source of robberies? It's not to get the Pot, it's because they are Cash ONLY businesses so it's a "smart choice to rob if you want cash".

[Anonymous]

Asian shops in USA are often cashless or try to because they are from China which as we largely cashless or a long time, because China cares less about human rights and privacy.

[Anonymous]

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Anonymous wrote:Musk and Trump killed consumer protection in this area

Get ready fur higher fees for c cards and banking with no caps

I heard they are trying to cap credit card fees at interest rate at 10%? What would make more sense is to have it limited to a percentage over a published borrowing rate. Some of the rates in the 20s are outrageous, even with the cost of protections they have for consumers. It should be high but no that high.

Trump was lying but Sanders called his bluff
https://www.sanders.senate.gov/press-releases/news-sanders-hawley-introduce-bill-capping-credit-card-interest-rates-at-10/

[Anonymous]

[quote=Anonymous][quote=Anonymous]I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets. [/quote]

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??[/quote]

Not you again. I know you enjoy demeaning any poster because you like to build up your own self-esteem but it's tiring. Take a break and do something positive.

[Anonymous]

Anonymous wrote:I don’t. But you are fortunate and people do have true emergencies or problems that crop up like unexpected major auto work and they might need a few months to pay it off. Some people work hard and even have two jobs but aren’t able to build an adequate reserve. Paying astronomical interest rates sure doesn’t help the situation.

If you want those people to get loans, then you need either a high interest rate or a way to claw blood back from a stone. Banks aren't charities. If the government wants to make loans and forgive them, the government should do it

[Anonymous]

Anonymous wrote:Most credit cards give you back 1-2% of what you spend in cash or other type of rewards. If you really want to use a credit card with a merchant that passes fees on to you, at least use a 2% reward card.

Yeah that just seems like a circle of loss.
The credit cards WANT me to use the card. The merchant WANTS to sell their stuff and make it easy and convenient. But now the merchants are getting greedy and someone said above, not wanting to pay for a convenience they are purchasing on behalf of making sales convenient for their customers.

So no I don't want to be a middleman absorbing fees and trying to claw some back.

[Anonymous]

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Anonymous wrote:technically it is illegal to charge more for a credit card but no one is holding them accountable. Not handling cash and managing deposits is worth the 3% fee.

It is not illegal to charge more for a credit card.

Never was from a federal standpoint, although a couple of states had laws against it in the past. It was against credit card acceptance agreements, which are not laws. The Supreme Court wiped out those state laws in 2017.

https://www.klgates.com/US-Supreme-Court-Sides-with-Merchants-in-Credit-Card-Surcharge-Case-But-the-Fight-Isnt-Over-Yet-04-04-2017

What state has a law banning charging more for credit card users?
I guess it's possible, but it's insane.

NY's law was about transparent advertising of prices.
"N.Y. Gen. Bus. Law § 518––prohibits merchants from imposing a surcharge on customers who pay with a credit card but allows merchants to give discounts to customers who pay with cash or other forms of payment."

[Anonymous]

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Anonymous wrote:Honda service in Bethesda also charges 3% if you use a credit card to pay.

Was coming here to say this! I get them not wanting to eat the cost of credit card fees on a car, but on my 120$ service?

Exactly. They wouldn’t be in business if people couldn’t use a credit card and “finance” some of the expense. It is crazy for a customer there to have to pay credit card interest rates and have to pay the transactional fee on top.

This is an asinine comment. The credit card interest rates/charges are completely voluntary, and have nothing to do with the merchant. Why should the merchant have to pay extra because the consumer chose a particular method of payment. Or, to adopt your framework, why should the merchant pay extra because the consumer chooses to finance the purchase?