Avoiding shafting my local merchants with card fees

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bnes
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Avoiding shafting my local merchants with card fees

Post by bnes » Thu Apr 06, 2017 6:39 pm

I'm shopping for new credit cards for my parents. I'm aware that the "interchange fee" varies based on card benefit level (here's a guide):
https://www.helcim.com/us/pricing/visa- ... nge-rates/
For example the interchange rate set by Visa for a Visa Debit is as low as .8% + 15 cents, and ranges up from there. A Visa Rewards Signature card for example is 2.300% + 10 cents.

Now I love getting "cash back" or travel rewards from cards, but not if it's going to screw my local merchant with higher fees in specific or on average.

-----------------------------------------------------
In the specific case my parents have perfect credit, spend mostly on groceries (on one card), and mostly general (on a second card at $2000/month). There is no need for any signature benefits at all. Possible cards are:
  • Citi DoubleCash 2% World Elite
  • MileagePlus Explorer
  • BarclayCard Cash Forward
Note: I'm also aware of the Main Street "Swipe Fee" reform movement:
http://www.standwithmainstreet.com/cont ... =swipefees

---------------------------------------------------------
What's the smallest "spread" between rewards and interchange fees? In other words, which card issuer is most efficient?

protagonist
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Re: Avoiding shafting my local merchants with card fees

Post by protagonist » Thu Apr 06, 2017 7:05 pm

Given the proportion of the populace that pays in stores with credit cards (especially for more expensive items), I doubt if you are shafting local merchants with card fees. I imagine their pricing structure already takes into account their cost of doing business, including what they lose to the CC companies, and thus everybody is paying more for items to compensate for CC fees. This is also why many local merchants require minimum spending requirements to use a card.

You could also use debit cards locally, which tend to charge merchants less I believe, and use credit cards that charge higher merchant fees when shopping at the big boxes or via companies like Amazon. That might take away a little bit of the pressure upon local business to compete. Just an idea...of course it would have to translate into a large movement to have any significant impact.....
Last edited by protagonist on Thu Apr 06, 2017 7:13 pm, edited 4 times in total.

iamlucky13
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Re: Avoiding shafting my local merchants with card fees

Post by iamlucky13 » Thu Apr 06, 2017 7:07 pm

No specific recommendation, but I go with the debit card or cash when I don't want to saddle a business with unnecessary charges.

If somebody knows of published info on such "spreads" as you ask about, I will be interested to read the info.

drawpoker
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Re: Avoiding shafting my local merchants with card fees

Post by drawpoker » Thu Apr 06, 2017 7:44 pm

Timely thread here. Have arranged for a small home improvement project this month with a local business.
After the rep came out, surveyed what was to be done, cost of materials, etc. , she phoned back with a quote.

Then, without me having to ask, she offered a discounted price if I paid in cash instead of credit card. 8-)

Now, that's how I like it - You Betcha :D

As a general rule, if a business is truly locally owned and operated (not part of chain or franchisee type) it is always a good idea to ask for a discount for paying in cash, as they have that flexibility to negotiate, unlike Mega Store.

If they get insulted, they aren't really very good businessmen/women, are they

Nyc10036
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Re: Avoiding shafting my local merchants with card fees

Post by Nyc10036 » Thu Apr 06, 2017 8:15 pm

Does cash include checks?

If it means really cash, I am not sure I would want to enable a business to avoid taxes by being able to not report that income.

sawhorse
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Re: Avoiding shafting my local merchants with card fees

Post by sawhorse » Thu Apr 06, 2017 8:36 pm

protagonist wrote:Given the proportion of the populace that pays in stores with credit cards (especially for more expensive items), I doubt if you are shafting local merchants with card fees. I imagine their pricing structure already takes into account their cost of doing business, including what they lose to the CC companies, and thus everybody is paying more for items to compensate for CC fees. This is also why many local merchants require minimum spending requirements to use a card.
This. If the fees are too high, they won't accept the card (many places don't accept American Express for this reason), or they have a minimum spending.

mhalley
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Re: Avoiding shafting my local merchants with card fees

Post by mhalley » Thu Apr 06, 2017 8:41 pm

Cash generally includes checks. I doubt a roofer for example would expect 10k+ In non-sequential bills on completion of a roof.
Everything costs the merchant Money. If you pay cash, it costs them labor for the person that makes change, reconciles the cash register, takes the money to the bank, etc. All of this is built into the price, not my responsibility to ensure the merchant priced it such that they make an adequate profit.

Beth*
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Re: Avoiding shafting my local merchants with card fees

Post by Beth* » Thu Apr 06, 2017 8:52 pm

When I have had local businesses offer me a discount for paying cash, they generally mean cash, not a check. I have always assumed they are avoiding taxes by doing this, especially if the discount is on the order of 10 percent. The exception is my local gas station which posts both a cash and credit price and rings it up in their cash register when I pay cash.

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Re: Avoiding shafting my local merchants with card fees

Post by scotthal » Thu Apr 06, 2017 8:58 pm

FWIW - my dentist (these past 30+ years) offers a 5% cash discount for payment by cash or check. They save on processing fees :: billing cost. I save on out_of_pocket. Win! On the flip side, once charged a new heating system ($5K+) because the credit card surcharge was significantly less than the card's cashback bonus. Yr job is to watch your own pocket; merchants can trade time : billing cost : credit overhead on their own behalf.
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Doom&Gloom
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Re: Avoiding shafting my local merchants with card fees

Post by Doom&Gloom » Thu Apr 06, 2017 9:05 pm

Shaft your local merchant with card fees? The merchant sets his prices with the knowledge that customers may use cards.

Do what you wish, but there are many options if you want to help your local merchants. Paying with cash, tipping, and giving them more business are some that come immediately to my mind rather than creating more work for myself trying to micromanage credit card fees.

drawpoker
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Re: Avoiding shafting my local merchants with card fees

Post by drawpoker » Thu Apr 06, 2017 9:14 pm

@ nyc10036

"Cash" is generally construed as the same as "Good check" ( a term you see a lot at auctions, foreclosure sales, etc)

Meaning, the merchant can take that check instantly to the bank and get their money.

I actually had an old guy a couple years ago to mow my lawn. Sure enough, the old goat actually took my check and went straight to the bank and cashed it. :P Fine. If that what suited him, okay by me.

Of course, it is both implicit and explicit if a merchant specifies actual cash (U.S. currency, not banque checks) that may suggest the possibility there may be, er, um, some failure to report business income to the IRS.

Well, if so, what are we expected to do about it? In the absence of actual proof someone is actively cheating, i.e., under reporting income, are you advocating we immediately start boycotting this business.

On mere suspicion? Alone?

Seems to me quite a stretch..... :?

ResearchMed
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Re: Avoiding shafting my local merchants with card fees

Post by ResearchMed » Thu Apr 06, 2017 9:14 pm

bnes wrote:I'm shopping for new credit cards for my parents. I'm aware that the "interchange fee" varies based on card benefit level (here's a guide):
https://www.helcim.com/us/pricing/visa- ... nge-rates/
For example the interchange rate set by Visa for a Visa Debit is as low as .8% + 15 cents, and ranges up from there. A Visa Rewards Signature card for example is 2.300% + 10 cents.

Now I love getting "cash back" or travel rewards from cards, but not if it's going to screw my local merchant with higher fees in specific or on average.

-----------------------------------------------------
In the specific case my parents have perfect credit, spend mostly on groceries (on one card), and mostly general (on a second card at $2000/month). There is no need for any signature benefits at all. Possible cards are:
  • Citi DoubleCash 2% World Elite
  • MileagePlus Explorer
  • BarclayCard Cash Forward
Note: I'm also aware of the Main Street "Swipe Fee" reform movement:
http://www.standwithmainstreet.com/cont ... =swipefees

---------------------------------------------------------
What's the smallest "spread" between rewards and interchange fees? In other words, which card issuer is most efficient?
For some years, we ran a vacation cabin rental business, mostly long distance, so we had no choice but to use charge cards (or we'd have "the check's in the mail" while we turned away others, etc.).

The main "cost" of using cards is just that: the cost of using charge cards, *any* charge card.
The difference in costs to us among the various types of cards wasn't a major factor at all.
The entire structure seemed rather byzantine, and we only accepted Visa, MC, and Discover (almost never used). So we didn't even have the added complexity - or cost - of Amex.

If someone cost us a fraction of a percent because they used a "rewards" card vs. a plain vanilla card, that disappeared into the cost of doing business, and we never gave it a thought for someone we were happy to rent a cabin.

We might have taken checks if we could have been there to process them immediately, but that wasn't a practical choice for us.

RM
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Re: Avoiding shafting my local merchants with card fees

Post by LarryAllen » Thu Apr 06, 2017 9:21 pm

I am a local merchant and I don't feel shafted when people use a card. It's our choice to take cards and thus customers choice to use it to pay. So we pay 2-3% and raise prices by 5%. It all works out. I think you are over-thinking this one.

harvestbook
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Re: Avoiding shafting my local merchants with card fees

Post by harvestbook » Thu Apr 06, 2017 9:46 pm

Must be nice to just sit in the middle and take 2-3 percent from both sides.
I'm not smart enough to know, and I can't afford to guess.

richardglm
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Re: Avoiding shafting my local merchants with card fees

Post by richardglm » Thu Apr 06, 2017 9:57 pm

Also, you should realize that "interchange fees" which you are looking at directly here, they are not the fee which is charged to the merchant (this is a very common misconception)

Interchange fees, strictly speaking, are the fees paid by the merchant's bank to the cardholder's bank. The merchant's bank will also want their own cut and the actual fees the merchant pays their payment processor can vary quite a bit. For example, the very popular Square payment system which many merchants value for its simplicity charges a flat 2.75% for all cards, including debit.

bnes
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Re: Avoiding shafting my local merchants with card fees

Post by bnes » Thu Apr 06, 2017 11:26 pm

OP here. To steer this back on track:
  • We're going to get and use a credit card.
  • I'd like to know in advance what "fee level" the issuing bank gets.
Is there a reliable way to shop for cards, that shows the Interchange Fee category?
--
In answer to above: I know many merchants pay a flat fee, and the Interchange fee is hidden. That's not the point. Personally I hold the Spark Business 2% from Capital One, and the Citi Double Cash 2%. I know both are 'VISA Signature Rewards' cars. The DoubleCash also offers a purchase rewind policy, so I don't have to be careful shopping, because it refunds the purchase price difference within 90 days or so. Crazy. All that money has to come from somewhere. Free Lunches are rarely Really Free.

I just want to know what fee category various cards are, so next time I can choose eyes open.
Last edited by bnes on Mon Jul 31, 2017 11:15 pm, edited 1 time in total.

Cheyenne
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Re: Avoiding shafting my local merchants with card fees

Post by Cheyenne » Fri Apr 07, 2017 6:45 am

I am a local merchant and I don't feel shafted when people use a card. It's our choice to take cards and thus customers choice to use it to pay. So we pay 2-3% and raise prices by 5%. It all works out. I think you are over-thinking this one.
We sell merchandise in the $1k to $10k price range and customers frequently ask for a discount. I offer a discount of 2% if they pay by cash or check, or I offer free shipping if the item is to be shipped. That way we both receive a discount.

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Re: Avoiding shafting my local merchants with card fees

Post by Cheyenne » Fri Apr 07, 2017 6:58 am

The entire structure seemed rather byzantine, and we only accepted Visa, MC, and Discover (almost never used). So we didn't even have the added complexity - or cost - of Amex.
We have had numerous bank-sponsored credit card merchant accounts over the years with their mystifying array of discount rates and fees. Lately we have also been using Square. Square only has two rates: one for card-present and another for card-not-present transactions. It's a little higher than the base rate with bank-sponsored accounts but we seldom receive the base rate anyway. And with Square all cards cost the same including Amex. It's the simplicity of it.

Nyc10036
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Re: Avoiding shafting my local merchants with card fees

Post by Nyc10036 » Fri Apr 07, 2017 7:15 am

drawpoker wrote:@ nyc10036

"Cash" is generally construed as the same as "Good check" ( a term you see a lot at auctions, foreclosure sales, etc)

Meaning, the merchant can take that check instantly to the bank and get their money.

I actually had an old guy a couple years ago to mow my lawn. Sure enough, the old goat actually took my check and went straight to the bank and cashed it. :P Fine. If that what suited him, okay by me.

Of course, it is both implicit and explicit if a merchant specifies actual cash (U.S. currency, not banque checks) that may suggest the possibility there may be, er, um, some failure to report business income to the IRS.

Well, if so, what are we expected to do about it? In the absence of actual proof someone is actively cheating, i.e., under reporting income, are you advocating we immediately start boycotting this business.

On mere suspicion? Alone?

Seems to me quite a stretch..... :?
Considering that my income is reported on 1099s and W2s, I am not exactly keen on helping a company that explicitly wants cold hard cash to evade reporting the income. I have encountered a few. I refuse to patronize those.

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Re: Avoiding shafting my local merchants with card fees

Post by donaldfair71 » Fri Apr 07, 2017 7:19 am

protagonist wrote:Given the proportion of the populace that pays in stores with credit cards (especially for more expensive items), I doubt if you are shafting local merchants with card fees. I imagine their pricing structure already takes into account their cost of doing business, including what they lose to the CC companies, and thus everybody is paying more for items to compensate for CC fees. This is also why many local merchants require minimum spending requirements to use a card.

You could also use debit cards locally, which tend to charge merchants less I believe, and use credit cards that charge higher merchant fees when shopping at the big boxes or via companies like Amazon. That might take away a little bit of the pressure upon local business to compete. Just an idea...of course it would have to translate into a large movement to have any significant impact.....
This is, in my opinion, the proper way to look at it. When I worked for my father's small, 6 person operation (in firewood), we had credit card capabilities but just rolled the fees into the overall price. I got the impression from other business owners in the area that this was the common practice. I just assume that every possible fee is built into the price.

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Re: Avoiding shafting my local merchants with card fees

Post by jlcnuke » Fri Apr 07, 2017 7:26 am

LarryAllen wrote:I am a local merchant and I don't feel shafted when people use a card. It's our choice to take cards and thus customers choice to use it to pay. So we pay 2-3% and raise prices by 5%. It all works out. I think you are over-thinking this one.
Any business that knows what it's doing has priced in the cost of doing business (paying card fees), like LarryAllen here. Thus, I choose to maximize my rewards instead of trying to maximize their profit margin.

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Re: Avoiding shafting my local merchants with card fees

Post by TomatoTomahto » Fri Apr 07, 2017 7:35 am

harvestbook wrote:Must be nice to just sit in the middle and take 2-3 percent from both sides.
Stealers Wheel wrote: Clowns to the left of me, jokers to the right,
Here I am, stuck in the middle with you
Thank God there's nothing more to it than taking the 2-3 percent to the bank.
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Re: Avoiding shafting my local merchants with card fees

Post by NotWhoYouThink » Fri Apr 07, 2017 7:53 am

The only time I worry about fees is when I make big donations to charities. Almost all of them will accept credit cards, but I can't stand knowing that 2-3% of my donation went to the bank instead of the charity, even if I do get some cash back. So I write checks.

Sometimes a business will not take credit cards because of the fees (home repair kinds of jobs), sometimes they offer a discount for a check, I frequently ask about that. I do not pay cash to businesses that I suspect will not report the income. Ok, once I did in a NYC restaurant, but it was late and we were hungry.

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Re: Avoiding shafting my local merchants with card fees

Post by Broken Man 1999 » Fri Apr 07, 2017 8:34 am

In most cases I am more interested in the state of my wallet than the state of the merchant's wallet. They know their finances better than their customers. If they offer to accept credit cards, I usually use them.

I can think of one exception: my barber. My long-term barber opened a shop on her own, and takes credit cards. But after a hair cut and a beer (or two), I am not going to further dilute her earnings. And for good measure I drop off a case of beer to her during Christmas season. She has cut my hair for at least 20 years. I probably over tip, as well. $12 for senior rate, $5 tip. Her neck massages are killer.

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F150HD
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Re: Avoiding shafting my local merchants with card fees

Post by F150HD » Fri Apr 07, 2017 9:17 am

bnes wrote: Now I love getting "cash back" or travel rewards from cards, but not if it's going to screw my local merchant with higher fees in specific or on average.
what do you care what it costs a retailer to accept your card? I must've missed something

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Re: Avoiding shafting my local merchants with card fees

Post by JW-Retired » Fri Apr 07, 2017 9:37 am

I'm certain they don't feel shafted in the slightest. If local merchants felt shafted by my credit card fees, they would not have invoked a policy of refusing to take paper checks. Most of them I frequent have voted for credit cards in this perfectly clear way. :annoyed
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j0nnyg1984
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Re: Avoiding shafting my local merchants with card fees

Post by j0nnyg1984 » Fri Apr 07, 2017 10:17 am

Cheyenne wrote:
I am a local merchant and I don't feel shafted when people use a card. It's our choice to take cards and thus customers choice to use it to pay. So we pay 2-3% and raise prices by 5%. It all works out. I think you are over-thinking this one.
We sell merchandise in the $1k to $10k price range and customers frequently ask for a discount. I offer a discount of 2% if they pay by cash or check, or I offer free shipping if the item is to be shipped. That way we both receive a discount.
Sorry, but that is nowhere near enough of a discount. My CC gives 2.625%. The major part of the transaction is the protection that a credit card gives me over cash. I don't know you or your company, but speaking generally, I would rather have dispute power than save a couple of dollars on a transaction.

123
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Re: Avoiding shafting my local merchants with card fees

Post by 123 » Fri Apr 07, 2017 10:31 am

Banks do not process checks deposited by merchants for free. Generally, merchants are a "cash cow" for bank fees.
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munemaker
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Re: Avoiding shafting my local merchants with card fees

Post by munemaker » Fri Apr 07, 2017 1:02 pm

bnes wrote:I'm shopping for new credit cards for my parents. I'm aware that the "interchange fee" varies based on card benefit level (here's a guide):
https://www.helcim.com/us/pricing/visa- ... nge-rates/
For example the interchange rate set by Visa for a Visa Debit is as low as .8% + 15 cents, and ranges up from there. A Visa Rewards Signature card for example is 2.300% + 10 cents.

Now I love getting "cash back" or travel rewards from cards, but not if it's going to screw my local merchant with higher fees in specific or on average.

-----------------------------------------------------
In the specific case my parents have perfect credit, spend mostly on groceries (on one card), and mostly general (on a second card at $2000/month). There is no need for any signature benefits at all. Possible cards are:
  • Citi DoubleCash 2% World Elite
  • MileagePlus Explorer
  • BarclayCard Cash Forward
Note: I'm also aware of the Main Street "Swipe Fee" reform movement:
http://www.standwithmainstreet.com/cont ... =swipefees

---------------------------------------------------------
What's the smallest "spread" between rewards and interchange fees? In other words, which card issuer is most efficient?
I don't consider any of that, and, to the degree possible, I avoid merchants that tack on any kind of fee or offer discounts for cash.

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Re: Avoiding shafting my local merchants with card fees

Post by englishgirl » Fri Apr 07, 2017 3:43 pm

Personally, I feel more shafted being asked to give a 5% discount for cash. First, I pay less than 3% in cc fees, so by asking for a 5% discount you're asking for more back. And second, then I gotta take your darn cash to the bank. Credit card payments go direct into my account from Square, and I can deposit checks by taking photos using the bank's app.

Of course, if you want to give me cash or a check for my full fee, then I win by not having to give the cc fee away, and you don't pay any extra than you would if you used a card. [Although if you're getting cash back on credit card payments, then you are paying extra by using cash or a check, because you don't get cashback from those.]
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Re: Avoiding shafting my local merchants with card fees

Post by MnD » Fri Apr 07, 2017 8:15 pm

Employees (even at small businesses), steal cash or it can be lost or stolen in a robbery. Checks bounce. Many retailers may have a flat % fee program for all plastic be it debit, low-end credit cards or high end reward cards.

The bane of (for example) a local restaurant is the table that gets ice-water all around, no alcohol, no appetizers, no salad or soups - then gets the cheapest entrees, and after no dessert presents a coupon and tips poorly after sitting at the table forever.

Higher income customers with a high-end rewards cards that (just maybe) cost 1-2% more in fees per total check are not top of the list on local merchant concerns. They would probably trade their entire customer base for that demographic if they could do so.

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Re: Avoiding shafting my local merchants with card fees

Post by dbltrbl » Fri Apr 07, 2017 8:56 pm

All local merchants I deal with in Midwest cash means check too. I would not deal with any one who insists on bills only. yes they are avoiding taxes but check just saves on CC fees.

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Re: Avoiding shafting my local merchants with card fees

Post by Jags4186 » Fri Apr 07, 2017 9:41 pm

I always assume the "cash discount" is code for "we'll give you a discount because I'm putting this in my pocket and not paying taxes on it." If the cash discount is less than the rewards I'd earn from the CC, I'm paying with a CC.

Businesses take credit cards because it's good for business...simple as that.

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Re: Avoiding shafting my local merchants with card fees

Post by telemark » Sat Apr 08, 2017 11:14 am

F150HD wrote:
bnes wrote: Now I love getting "cash back" or travel rewards from cards, but not if it's going to screw my local merchant with higher fees in specific or on average.
what do you care what it costs a retailer to accept your card? I must've missed something
I can still remember when the car repair place on the corner was an empty parking lot, and people would come from who knows where to hold loud parties on weekends. Helping them stay in business improves my quality of life. Also, as a Boglehead I dislike hidden fees.

I generally use my bank debit card with local merchants, but I can't say how much it matters, if at all. If I had accurate information I could make better decisions.

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Re: Avoiding shafting my local merchants with card fees

Post by drawpoker » Sat Apr 08, 2017 12:45 pm

Jags4186 wrote:I always assume the "cash discount" is code for "we'll give you a discount because I'm putting this in my pocket and not paying taxes on it."
I think that is a bit extreme. There is a very large, long-established furniture place in our town that regularly advertises prices with the notation "5% off with cash or check" It has never entered anyone's mind to my knowledge that this business would under-report sales or attempt to evade reporting its income.

Keep in mind - when a business makes a transaction with a credit card there is always the risk that this was a impulse purchase on the part of some airhead buyer, and later, they will regret and decide they really couldn't afford whatever it was, and very soon there is a chargeback on the merchant's account when the customer disputes the charge, saying the merchandise was flawed, or it didn't fit in, or somesuch.

A customer who makes a purchase either with cash, check, or debit card is likely to be more committed to the purchase, and not buying on a whim which causes them to later change their mind.

So, while it can be advantageous for merchants to accept credit cards, there is that downside to the equation.

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F150HD
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Re: Avoiding shafting my local merchants with card fees

Post by F150HD » Sun Apr 09, 2017 10:04 am

telemark wrote:
F150HD wrote:
bnes wrote: Now I love getting "cash back" or travel rewards from cards, but not if it's going to screw my local merchant with higher fees in specific or on average.
what do you care what it costs a retailer to accept your card? I must've missed something
I can still remember when the car repair place on the corner was an empty parking lot, and people would come from who knows where to hold loud parties on weekends. Helping them stay in business improves my quality of life. Also, as a Boglehead I dislike hidden fees.

I generally use my bank debit card with local merchants, but I can't say how much it matters, if at all. If I had accurate information I could make better decisions.

seems like a reach to assume companies don't stay in business simply due to 'credit card fees' and that social unrest (loud parties) arise as a result. Correlation doesn't imply causation.

Debit card transactions often carry the same fees as credit card transactions, so by using " bank debit card with local merchants" you're actually doing the very thing you're attempting to avoid.

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F150HD
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Re: Avoiding shafting my local merchants with card fees

Post by F150HD » Sun Apr 09, 2017 10:08 am

Broken Man 1999 wrote:In most cases I am more interested in the state of my wallet than the state of the merchant's wallet.
+1

I often actually avoid businesses that don't allow credit cards as it reduces my consumer protections on products I buy (a new TV for example)

Some mom/pop stores and restaurants don't take credit, fine, but I rarely shop anywhere in person where one cannot use a card.

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telemark
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Re: Avoiding shafting my local merchants with card fees

Post by telemark » Sun Apr 09, 2017 2:15 pm

F150HD wrote: seems like a reach to assume companies don't stay in business simply due to 'credit card fees' and that social unrest (loud parties) arise as a result. Correlation doesn't imply causation.
It doesn't merely seem like a reach, it definitely is a reach. But my interest in the welfare of local businesses is real enough.
Debit card transactions often carry the same fees as credit card transactions, so by using " bank debit card with local merchants" you're actually doing the very thing you're attempting to avoid.
That's the trouble with hidden fees; one never really knows what is going on. Businesses routinely break out sales tax as a line item. Why not credit card fees? If I had accurate information I could make better decisions.

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Re: Avoiding shafting my local merchants with card fees

Post by ResearchMed » Sun Apr 09, 2017 2:26 pm

telemark wrote:
F150HD wrote: seems like a reach to assume companies don't stay in business simply due to 'credit card fees' and that social unrest (loud parties) arise as a result. Correlation doesn't imply causation.
It doesn't merely seem like a reach, it definitely is a reach. But my interest in the welfare of local businesses is real enough.
Debit card transactions often carry the same fees as credit card transactions, so by using " bank debit card with local merchants" you're actually doing the very thing you're attempting to avoid.
That's the trouble with hidden fees; one never really knows what is going on. Businesses routinely break out sales tax as a line item. Why not credit card fees? If I had accurate information I could make better decisions.
Except for the "general" rounded fees for using charge cards, the structure is so byzantine, and it also varies somewhat with the specific vendor and/or processor.
So other than figuring (yourself) "something like 2.5-3%", you probably couldn't get an accurate percentage at the point of purchase.

RM
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Re: Avoiding shafting my local merchants with card fees

Post by Good Listener » Sun Apr 09, 2017 3:03 pm

drawpoker wrote:Timely thread here. Have arranged for a small home improvement project this month with a local business.
After the rep came out, surveyed what was to be done, cost of materials, etc. , she phoned back with a quote.

Then, without me having to ask, she offered a discounted price if I paid in cash instead of credit card. 8-)

Now, that's how I like it - You Betcha :D

As a general rule, if a business is truly locally owned and operated (not part of chain or franchisee type) it is always a good idea to ask for a discount for paying in cash, as they have that flexibility to negotiate, unlike Mega Store.

If they get insulted, they aren't really very good businessmen/women, are they
I will never pay in cash. Compare "shafting" the business with a credit card fee vs shafting taxpayers with non-responsive income.

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Re: Avoiding shafting my local merchants with card fees

Post by ralph124cf » Sun Apr 09, 2017 3:46 pm

On a sufficiently large purchase, I will frequently ask for a 5% discount for cash. If the merchant counters with 2%, I'll take it.

Ralph

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Re: Avoiding shafting my local merchants with card fees

Post by michaeljc70 » Sun Apr 09, 2017 4:11 pm

They bake those fees into the prices. So, if you use pay cash and the next guy is getting a 2% reward, you are helping to pay for that reward. I guess you could argue if everyone paid cash the prices might be lowered.

I live in a big city and there aren't many Mom and Pop places I go. Knowing family that works for tips, I know they appreciate the tip in cash. Sometimes I have it and charge the meal and leave the tip in cash. Often I don't have much cash and just put it on the card.

I felt bad last week. Went to Home Depot to buy a couple screws. It came to $1 something and I had no cash on me. Luckily I was at the self checkout so no cashier to give me a dirty look using a credit card for such a purchase. I do typically try to carry a small amount of cash for small purchases.

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Re: Avoiding shafting my local merchants with card fees

Post by MnD » Sun Apr 09, 2017 6:28 pm

I was working on a major University campus last week and bought coffee every morning at a campus snack vendor - never saw anything other than card purchases by students typically for $1.50 to $4 sales. The era of cash/check is pretty much over and you should get whatever card (debit, basic credit or rewards credit) that is in your best self-interest.

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Re: Avoiding shafting my local merchants with card fees

Post by bnes » Mon May 15, 2017 12:20 am

F150HD wrote:Debit card transactions often carry the same fees as credit card transactions, so by using " bank debit card with local merchants" you're actually doing the very thing you're attempting to avoid.
Some processors have a flat rate, but any merchant with some volume or smarts gets access to lower rates for debit cards. Let's just say that debit is the same or less, in terms of burden placed on the merchant. The era of cash is over, and the USA is behind that curve if anything.

The bigger danger is with monopoly power, Visa/MC can raise fees without consequence. These guys are trying to push back: http://www.standwithmainstreet.com/cont ... =swipefees

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Re: Avoiding shafting my local merchants with card fees

Post by Easy Rhino » Mon May 15, 2017 1:54 pm

Was having a fairly large project (over $10k) done by a contractor. he mentioned he could take credit cards, but also that he paid a decent fee surcharge on it. I asked him instead if he wanted to just give a 2% discount on the bill (which is what I would have gotten in rewards), and he was happy to take a check.

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Re: Avoiding shafting my local merchants with card fees

Post by flamesabers » Mon May 15, 2017 2:36 pm

bnes wrote:
F150HD wrote:Debit card transactions often carry the same fees as credit card transactions, so by using " bank debit card with local merchants" you're actually doing the very thing you're attempting to avoid.
Some processors have a flat rate, but any merchant with some volume or smarts gets access to lower rates for debit cards. Let's just say that debit is the same or less, in terms of burden placed on the merchant. The era of cash is over, and the USA is behind that curve if anything.

The bigger danger is with monopoly power, Visa/MC can raise fees without consequence. These guys are trying to push back: http://www.standwithmainstreet.com/cont ... =swipefees
If Visa/MC raised their fees too much, there would be consequences. Merchants would either stop accepting credit cards, apply a surcharge fee for credit cards (or offer a cash discount), or start accepting checks again.

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telemark
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Re: Avoiding shafting my local merchants with card fees

Post by telemark » Mon May 15, 2017 3:17 pm

bnes wrote:
F150HD wrote:Debit card transactions often carry the same fees as credit card transactions, so by using " bank debit card with local merchants" you're actually doing the very thing you're attempting to avoid.
Some processors have a flat rate, but any merchant with some volume or smarts gets access to lower rates for debit cards. Let's just say that debit is the same or less, in terms of burden placed on the merchant. The era of cash is over, and the USA is behind that curve if anything.

The bigger danger is with monopoly power, Visa/MC can raise fees without consequence. These guys are trying to push back: http://www.standwithmainstreet.com/cont ... =swipefees
A small grocery store I patronize has a sign at the checkout counter requesting the use of debit cards "to help maintain our low prices." Admittedly, I can't prove that they aren't trying to mislead me.

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Re: Avoiding shafting my local merchants with card fees

Post by flamesabers » Mon May 15, 2017 3:41 pm

telemark wrote:A small grocery store I patronize has a sign at the checkout counter requesting the use of debit cards "to help maintain our low prices." Admittedly, I can't prove that they aren't trying to mislead me.
Does the store offer cash discounts for those who pay with a debit card? If not, I would see this as the store asking me to take the risk of my bank account getting drained by cyber-criminals (and getting my bank to restore my stolen money in a timely manner) for the non-quantifiable promise that the store will continue to sell its products at a low price.

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Re: Avoiding shafting my local merchants with card fees

Post by straws46 » Mon May 15, 2017 4:00 pm

Debit card fees are restricted by the Durbin amendment to the Dodd-Frank act. Instead of benefitting consumers it caused Home Depot and Walmart to have to revise their earnings guidance.

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telemark
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Re: Avoiding shafting my local merchants with card fees

Post by telemark » Mon May 15, 2017 4:07 pm

flamesabers wrote:
telemark wrote:A small grocery store I patronize has a sign at the checkout counter requesting the use of debit cards "to help maintain our low prices." Admittedly, I can't prove that they aren't trying to mislead me.
Does the store offer cash discounts for those who pay with a debit card? If not, I would see this as the store asking me to take the risk of my bank account getting drained by cyber-criminals (and getting my bank to restore my stolen money in a timely manner) for the non-quantifiable promise that the store will continue to sell its products at a low price.
Neither the risk or the reward appear to be quantifiable here, so you are free to assign whatever values you think best. I offer it as a minor data point in a subject generally lacking in transparency.

There was a time when hidden fees were standard practice in mutual funds also. That was just the way it was.

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