7 ms·
> I don’t pay a fee on my credit cards, the merchant does While that may be technically correct, it's ignorant of the fact that costs are always passed down th
by yebyen 8y ago
> I don’t pay a fee on my credit cards, the merchant does
While that may be technically correct, it's ignorant of the fact that costs are always passed down the line in any economic relationship like you're describing.
That fraud protection costs the card issuers, which is the basis for that merchant fee, and the merchant passes the cost on in the form of higher prices. (Merchant accounts with higher fraud rates will pay higher fees!)
So from another perspective, you actually are paying the bill for those unknown percentage of frauds, which you wouldn't be as much on the hook for so directly if only everyone was responsible for their own individual security.
- toufiqbarhamov 8y agoIf the price of Good N is Value of N+x where x is a markup to cover the costs you’re talking about, that cost is passed on to people who pay with any means. If I buy a TV with cash, or credit card, it costs the same. Except of course that I can get cash back on my card, but not with cash (or bitcoin). So, credit card or not, the cost is there, even if I pay with bitcoin or ether. Except of course for the benefits of the credit card.
- nonbel 8y ago>" that cost is passed on to people who pay with any means. If I buy a TV with cash, or credit card, it costs the same." If people start charging less when paid via methods that have less chargeback risk will you reassess?
- thiagotomei 8y agoAs a matter of fact, this (merchants giving a discount for cash transactions) used to be illegal in Brazil. It recently became legal, but I haven't seen much evidence of changes.
- nonbel 8y agoCash is also more easily counterfeited than card transactions. I'm not sure how the risk of a fraudulent transaction works out in the end.
- toufiqbarhamov 8y agoIt would have to be savings in excess of what I’d get through rewards or cash back, and I’d have to trust the, utmyes id reasses.
- deleted 8y ago[deleted]
- kazinator 8y ago> If I buy a TV with cash, or credit card, it costs the same. Only if the vendor of the TV is abiding by the rules of the credit card provider not to offer discounts for cash transactions. In effect, the customers buying TV's with cash, paying the same, are paying a "credit card tax" to support the credit card users. Also, they pay the same, but don't earn any of the incentivizing kickbacks (points, cash back, ...).