8 ms·

Shoppers Love Rewards Credit Cards, Retailers Hate Them

42 points by prostoalex 8y ago

neonate 8y ago
http://archive.is/gEOen http://archive.is/gEOen
pyther24 8y ago
I'd love to pay cash, but it just doesn't make sense given the rewards and the benefits of the reward credit cards. Citi Double cash gives me 2% back and does price matching. That is a huge savings over the course of a year.
mjevans 8y ago
Paywalled, but yeah; it'd be nice if everyplace used something like GNU Taler instead of credit cards. https://taler.net/en/index.html https://taler.net/en/index.html While we're at it, please get rid of tracking and 'membership' cards too - just give me good prices on all the things every day.
- benbristow 8y ago
  They need to invest in a better website and make it friendlier for customers and merchants if they want to make that a thing. GNU have never been good at design
  - mjevans 8y ago
    You'd have to have buy-in from some lending institution, and presumably they'd be the ones to make the user facing documentation/education to fit their clients. However if it's only one bank we're right back to where we are with PayPal, where there's only one provider facing consumers / sellers; instead of competition to drive the markets towards actual efficiency and liberty.
- timbit42 8y ago
  No paywall: https://finance.yahoo.com/news/shoppers-love-rewards-credit-cards-140600098.html https://finance.yahoo.com/news/shoppers-love-rewards-credit-...
jarym 8y ago
Here in the UK I’ve noticed that Amex is not accepted by a lot of smaller businesses. When I ask why I’m told it’s because their fees are 4-5% - higher than both Mastercard and Visa. The thing is reward credit cards really feel like the banks are fleecing merchants and giving a small portion as a kick back to the consumer. If card issuers want to provide an incentive to their customers then they shouldn’t fund it by charging the merchants more. All that will likely happen is merchants will increase their prices and those without reward cards will end up paying more and getting less. It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’. If Visa and Mastercard don’t want retailers to get selective then there needs to be a single charge rate - and I think it would be a good idea that this information is shared with purchasers at time of a payment.
- gwilliams 8y ago
  When I operated a store in Canada, Amex would hold on to the money for an extra 30 days beyond the next monthly reimbursement cycle, unlike Visa/MC.
- gambiting 8y ago
  It's not just Amex - I found quite a few places in UK just straight up don't accept credit cards at all. It's cash or debit card only, again - because of higher processing fees.
  - mattmanser 8y ago
    Not these days, that's all but disappeared, at least in the Midlands where I live. Amex though, very few places accept amex.
    - isostatic 8y ago
      Wouldn't go for "very few", the majority (sure not all) of places do in my experience
- amaccuish 8y ago
  The issue you refer to here was spoken about in a recent buzzfeed article that appeared on here :) https://www.buzzfeednews.com/article/venessawong/were-all-subsidizing-people-who-use-american-express https://www.buzzfeednews.com/article/venessawong/were-all-su... https://news.ycombinator.com/item?id=17450891 https://news.ycombinator.com/item?id=17450891
raverbashing 8y ago
The rewards motives are 2 fold: 1) to have the customer user their card (obviously) 2) to centralize spending in one card, so that the card holders have your information and spending habits Some cards give better rewards for some type of shops. Amazon has their own CC as well. Outside of the US/Canada most people get CCs from their bank and not from 3rd part vendors though.
moviuro 8y ago
I'm not familiar with Reward Credit Cards, which seems to not have taken off in France. Cashback here is opt-in, bank- and retailer-specific. Meaning that my regular MasterCard from Bank B used to purchase stuff at retailer R gets me x% cashback. So in a way, retailers' woes won't (shouldn't) happen here...
- ubernostrum 8y ago
  This isn't just about cash back -- it's also about cards that provide points for airline/hotel/etc. loyalty programs. Air France, incidentally, seems to have several Mastercard-branded cards which reward with Flying Blue miles.
- eloisant 8y ago
  Well, most cards in France are not credit cards any way, they're debit cards. Sometimes you can have credit cards with deferred payment (everything at the end of the month instead of immediately) but actual revolving credit cards, like in US are pretty rare.
bluecalm 8y ago
There should be credit card charges added to every bill. This way we would have competition to make things cheaper instead if pointless reward systems - the sole purpose of those being to stifle competition. If the stores want to give discount for paying with card they could do for example 0.5% or 1% and add the rest of the charge to the bill so there is still incentive for CC companies to compete. As it is customers paying with cards get a hidden discount in comparison to those who pay with cash. Shops are forced to cover that discount as well. There is no incentive to provider cheaper payments either as the customers won't benefit. We really need a law that prohibits those hidden charges.
- baddox 8y ago
  That could be an interesting approach, although I suspect the current arrangements between credit card processors and retailers are more complicated than a simple fee that would be known at the time of each transaction.
- mike22223333 8y ago
  If you charge credit card customers extra, credit card companies block you from network.
  - hocuspocus 8y ago
    That is not true everywhere.
- jpatokal 8y ago
  In Australia, despite vociferous opposition from the CC lobby, it's legal for merchants to charge reasonable fees to cover CC costs and many do. Free Amex acceptance, in particular, is quite low.
- CogitoCogito 8y ago
  I feel like maybe the store should just receive the payment in full. Then e.g. Visa could decide how best to make money off the system (say by charging the credit card users fees for usage).
- 8y ago
bacon_waffle 8y ago
Here in New Zealand, retailers will often charge a few percent extra for credit card purchases, and a lot of smaller shops won't accept them at all. EFTPOS (basically like a debit card in the states) seems to be much more commonly used, often with contactless terminals. It seems to work well - I do have a rewards credit card, but certainly couldn't get by with just that card.
- nisse72 8y ago
  In New Zealand, EFTPOS costs the retailer a fraction of what credit card transactions do. When you swipe/insert your debit card, it goes through the EFTPOS system. But when you use the same card contactlessly, payment is processed by the credit card company and the retailer is charged a credit card fee or similar. That's the reason many retailers don't accept contactless payment. The banks and card companies would surely love for EFTPOS to die, but the retailers love it. There's a reason every card issued today supports contactless payment, and you can't opt out.
denzil_correa 8y ago
This always reminds me of the alternative : cash [0]. [0] https://news.ycombinator.com/item?id=13782561 https://news.ycombinator.com/item?id=13782561
mike22223333 8y ago
If you charge credit card customers extra, credit card companies block you from network. This should be illegal but it's not.
- jpatokal 8y ago
  It is illegal in some countries like Australia.
vazamb 8y ago
Taxpayers already pay quite a bit to keep the cash system running. I think it would make sense for the state to provide baseline infrastructure for electronic payments.
amaccuish 8y ago
I feel like the right to reject would lead to awful problems. How do I know if the particular card I get would work at a particular shop etc. There is certainly a problem, but rejecting cards outside of the normal Visa/Mastercard/Amex system is not the way forward and would be very confusing.
onion-soup 8y ago
Solution to this problem already exists, it's called cryptocurrency. Yet people still trash it
- suprfsat 8y ago
  Merchants already have the right to reject customers who try to pay with cryptocurrency.
qubax 8y ago
Just a question. I saw this thread more than a day ago. "32 points by prostoalex 1 day ago | past | web | 32 comments" https://news.ycombinator.com/from?site=wsj.com https://news.ycombinator.com/from?site=wsj.com How come it's on the front page with "32 points by prostoalex 7 hours ago" How did "1 day ago" change to "7 hours ago"?
Mirioron 8y ago
Isn't it curious that in an age where people want more privacy and control over their data that shoppers would love these kinds of cards?
- ndnxhs 8y ago
  How is it any worse than other credit cards?
timbit42 8y ago
No paywall: https://finance.yahoo.com/news/shoppers-love-rewards-credit-cards-140600098.html https://finance.yahoo.com/news/shoppers-love-rewards-credit-...

42 points by prostoalex 8y ago

http://archive.is/gEOen http://archive.is/gEOen

I'd love to pay cash, but it just doesn't make sense given the rewards and the benefits of the reward credit cards. Citi Double cash gives me 2% back and does price matching. That is a huge savings over the course of a year.

mjevans 8y ago

Paywalled, but yeah; it'd be nice if everyplace used something like GNU Taler instead of credit cards. https://taler.net/en/index.html https://taler.net/en/index.html While we're at it, please get rid of tracking and 'membership' cards too - just give me good prices on all the things every day.

benbristow 8y ago
They need to invest in a better website and make it friendlier for customers and merchants if they want to make that a thing. GNU have never been good at design
- mjevans 8y ago
  You'd have to have buy-in from some lending institution, and presumably they'd be the ones to make the user facing documentation/education to fit their clients. However if it's only one bank we're right back to where we are with PayPal, where there's only one provider facing consumers / sellers; instead of competition to drive the markets towards actual efficiency and liberty.
timbit42 8y ago
No paywall: https://finance.yahoo.com/news/shoppers-love-rewards-credit-cards-140600098.html https://finance.yahoo.com/news/shoppers-love-rewards-credit-...

jarym 8y ago

Here in the UK I’ve noticed that Amex is not accepted by a lot of smaller businesses. When I ask why I’m told it’s because their fees are 4-5% - higher than both Mastercard and Visa. The thing is reward credit cards really feel like the banks are fleecing merchants and giving a small portion as a kick back to the consumer. If card issuers want to provide an incentive to their customers then they shouldn’t fund it by charging the merchants more. All that will likely happen is merchants will increase their prices and those without reward cards will end up paying more and getting less. It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’. If Visa and Mastercard don’t want retailers to get selective then there needs to be a single charge rate - and I think it would be a good idea that this information is shared with purchasers at time of a payment.

gwilliams 8y ago
When I operated a store in Canada, Amex would hold on to the money for an extra 30 days beyond the next monthly reimbursement cycle, unlike Visa/MC.
gambiting 8y ago
It's not just Amex - I found quite a few places in UK just straight up don't accept credit cards at all. It's cash or debit card only, again - because of higher processing fees.
- mattmanser 8y ago
  Not these days, that's all but disappeared, at least in the Midlands where I live. Amex though, very few places accept amex.
  - isostatic 8y ago
    Wouldn't go for "very few", the majority (sure not all) of places do in my experience
amaccuish 8y ago
The issue you refer to here was spoken about in a recent buzzfeed article that appeared on here :) https://www.buzzfeednews.com/article/venessawong/were-all-subsidizing-people-who-use-american-express https://www.buzzfeednews.com/article/venessawong/were-all-su... https://news.ycombinator.com/item?id=17450891 https://news.ycombinator.com/item?id=17450891

raverbashing 8y ago

The rewards motives are 2 fold: 1) to have the customer user their card (obviously) 2) to centralize spending in one card, so that the card holders have your information and spending habits Some cards give better rewards for some type of shops. Amazon has their own CC as well. Outside of the US/Canada most people get CCs from their bank and not from 3rd part vendors though.

moviuro 8y ago

I'm not familiar with Reward Credit Cards, which seems to not have taken off in France. Cashback here is opt-in, bank- and retailer-specific. Meaning that my regular MasterCard from Bank B used to purchase stuff at retailer R gets me x% cashback. So in a way, retailers' woes won't (shouldn't) happen here...

ubernostrum 8y ago
This isn't just about cash back -- it's also about cards that provide points for airline/hotel/etc. loyalty programs. Air France, incidentally, seems to have several Mastercard-branded cards which reward with Flying Blue miles.
eloisant 8y ago
Well, most cards in France are not credit cards any way, they're debit cards. Sometimes you can have credit cards with deferred payment (everything at the end of the month instead of immediately) but actual revolving credit cards, like in US are pretty rare.

bluecalm 8y ago

There should be credit card charges added to every bill. This way we would have competition to make things cheaper instead if pointless reward systems - the sole purpose of those being to stifle competition. If the stores want to give discount for paying with card they could do for example 0.5% or 1% and add the rest of the charge to the bill so there is still incentive for CC companies to compete. As it is customers paying with cards get a hidden discount in comparison to those who pay with cash. Shops are forced to cover that discount as well. There is no incentive to provider cheaper payments either as the customers won't benefit. We really need a law that prohibits those hidden charges.

baddox 8y ago
That could be an interesting approach, although I suspect the current arrangements between credit card processors and retailers are more complicated than a simple fee that would be known at the time of each transaction.
mike22223333 8y ago
If you charge credit card customers extra, credit card companies block you from network.
- hocuspocus 8y ago
  That is not true everywhere.
jpatokal 8y ago
In Australia, despite vociferous opposition from the CC lobby, it's legal for merchants to charge reasonable fees to cover CC costs and many do. Free Amex acceptance, in particular, is quite low.
CogitoCogito 8y ago
I feel like maybe the store should just receive the payment in full. Then e.g. Visa could decide how best to make money off the system (say by charging the credit card users fees for usage).
8y ago

bacon_waffle 8y ago

Here in New Zealand, retailers will often charge a few percent extra for credit card purchases, and a lot of smaller shops won't accept them at all. EFTPOS (basically like a debit card in the states) seems to be much more commonly used, often with contactless terminals. It seems to work well - I do have a rewards credit card, but certainly couldn't get by with just that card.

nisse72 8y ago
In New Zealand, EFTPOS costs the retailer a fraction of what credit card transactions do. When you swipe/insert your debit card, it goes through the EFTPOS system. But when you use the same card contactlessly, payment is processed by the credit card company and the retailer is charged a credit card fee or similar. That's the reason many retailers don't accept contactless payment. The banks and card companies would surely love for EFTPOS to die, but the retailers love it. There's a reason every card issued today supports contactless payment, and you can't opt out.

denzil_correa 8y ago

This always reminds me of the alternative : cash [0]. [0] https://news.ycombinator.com/item?id=13782561 https://news.ycombinator.com/item?id=13782561

mike22223333 8y ago

If you charge credit card customers extra, credit card companies block you from network. This should be illegal but it's not.

jpatokal 8y ago
It is illegal in some countries like Australia.

vazamb 8y ago

Taxpayers already pay quite a bit to keep the cash system running. I think it would make sense for the state to provide baseline infrastructure for electronic payments.

amaccuish 8y ago

I feel like the right to reject would lead to awful problems. How do I know if the particular card I get would work at a particular shop etc. There is certainly a problem, but rejecting cards outside of the normal Visa/Mastercard/Amex system is not the way forward and would be very confusing.

onion-soup 8y ago

Solution to this problem already exists, it's called cryptocurrency. Yet people still trash it

suprfsat 8y ago
Merchants already have the right to reject customers who try to pay with cryptocurrency.

qubax 8y ago

Just a question. I saw this thread more than a day ago. "32 points by prostoalex 1 day ago | past | web | 32 comments" https://news.ycombinator.com/from?site=wsj.com https://news.ycombinator.com/from?site=wsj.com How come it's on the front page with "32 points by prostoalex 7 hours ago" How did "1 day ago" change to "7 hours ago"?

Mirioron 8y ago

Isn't it curious that in an age where people want more privacy and control over their data that shoppers would love these kinds of cards?

ndnxhs 8y ago
How is it any worse than other credit cards?

timbit42 8y ago

No paywall: https://finance.yahoo.com/news/shoppers-love-rewards-credit-cards-140600098.html https://finance.yahoo.com/news/shoppers-love-rewards-credit-...