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Unrelated but husband and I stopped at an Indian grocery store to pick up some items for a chicken tikka masala recipe we found on YouTube. They insisted we pa

Unrelated but husband and I stopped at an Indian grocery store to pick up some items for a chicken tikka masala recipe we found on YouTube. They insisted we pay cash, even though they had a machine to swipe a card. We don’t carry cash and assumed their card machine was broken. As we apologized and started leaving, they suddenly agreed to accept a credit card. Presumably the transaction costs per swipe are high, although we were spending about $30 and not 50 cents or something minuscule. My more cynical side thinks they preferred cash because it’s harder to trace. Credit card transactions are probably automatically reported to the IRS by the payment processing company. Cash... well, unless the IRS sends someone to physically to your location, it’s harder to trace and easy to dodge taxes.

cco 8y ago
They are charged somewhere around 3%, it certainly adds up for an already extremely thin margin. Additionally your point about cash being less traceable is also at play, cash income is far less likely to be reported to the IRS. Add both of those factors in and it is clear to see why cash is preferred by small businesses.
flexer2 8y ago
I had a cab driver do this to me once, in 2016 or so. He dropped me off at the destination and told me it’d be $20 or whatever, cash only. I didn’t have cash on me, and said all I had was a card. He demanded that I prove I had no cash. Being a little dumbstruck and just wanting to get away from him I showed my empty wallet and he begrudgingly pulled out a phone with a square reader on it. Left a very sour taste in my mouth about cabs. It’s no surprise why Uber/Lyft are eating their lunch.
- TheChaplain 8y ago
  As I mentioned above, transaction fees are a killer on already thin margins. And in some states it's illegal to add a charge for the credit card transaction.
  - Kalium 8y ago
    As I understand it, that's often grounds for the merchant account provider to yank your ability to accept cards at all.
- rhcom2 8y ago
  In NYC if you even mention the TLC their card machines will start working very quickly.
- teeray 8y ago
  Lifehack: offer to call the cab company on speakerphone and pay with a credit card over the phone. This usually causes the in-cab CC readers to start working again.
dba7dba 8y ago
Considering the tax loopholes and deals the super rich get, I actually have no problem with the small mom/pop shops doing what they can to get a break on the fees.
- throwaway98121 8y ago
  I don’t share your views. There are legitimate services we need tax payer money to fund. Tax loopholes for the super rich are a problem that should be solved, but in my opinion, that doesn’t mean we should just cancel taxation or turn a blind eye to tax evasion. We should solve the problem with tax loopholes and enforce the system for all. Mom and pop businesses or small business are very foundational to our economy. Even though individually they’re small, large scale tax evasion would be death by a thousand cuts.
zhte415 8y ago
I'm curious why you don't carry cash?
- cperciva 8y ago
  I have friends who don't carry cash simply because they realized that it has been years since they spent any. I do carry cash, but the only time I recall spending any in Canada in the past couple of years was when I dropped some into a charity donation "hat" -- which I knew I would be doing, so I could easily have brought some along for that purpose rather than carrying cash around all the time.
- techsupporter 8y ago
  It's a fair question. I'm not the person to whom you replied but thought I'd contribute my view point. I don't carry cash because it feels more cumbersome and less speedy than paying with card. With cash, I either have to work out close to exact change or--when I'm out for a leisure day and going to several places--have a mass of coins jangling around at the end. I've noticed that I'm now irrationally irritated watching someone painstakingly count out $12.83 in exact change ahead of me at the till. It also makes it difficult for me to track where I'm spending. That $60 or $100 might have gone to eating out or a bookstore or some other random place. I'd rather have the card transaction to know and categorize for sure. Speaking of denominations, I'd rather not carry much money around on me yet ATMs around me only dispense in multiples of $20 and then you get into the fun dance of how to get smaller bills if needed. So many shops now say "no change made." Finally, I put all of the spending I can (basically everything except mortgage and student loan payments) on cards for the card benefits. Miles, automatic cash back, in-store discounts, etc. Those don't happen when paying by cash. (Yes, I know, the benefits are being paid out of the transaction fees that the merchant is charged plus interest that other people pay. I'm aware that I'm leveraging that and that prices would, possibly, be lower overall if we didn't use cards or didn't have the rewards. If that day comes, I will adapt.)
  - Izkata 8y ago
    No comment on the rest of it, but on this: > I don't carry cash because it feels more cumbersome and less speedy than paying with card. With cash, I either have to work out close to exact change or--when I'm out for a leisure day and going to several places--have a mass of coins jangling around at the end. I've noticed that I'm now irrationally irritated watching someone painstakingly count out $12.83 in exact change ahead of me at the till. I've actually timed the people in front of me, and the vast majority of the time, cards take nearly twice as long as cash. No idea why, as I would also expect counting out the change to more than make up for that. (I'm in the US, maybe the systems are different enough to account for this?)
TheChaplain 8y ago
The transaction costs are unfortunately not negligible for small vendors, they don't have the power to negotiate like Walmart et al.
- drb91 8y ago
  IME vendors simply pass the charge along to consumers these days, esepcially for small purchases.
  - 1over137 8y ago
    Specifically, they pass it on to all their customers, not to only those customers using cards (doing so is against the merchant-processor agreements). i.e. those using cards are in effect increasing the price for those not using cards.
    - kmlx 8y ago
      in many places in europe there will be a surcharge added depending on the type of card you’re paying with.
      - doikor 8y ago
        And in some places in Europe that is illegal. At least here in Finland adding any hidden fees to a retail list price is illegal (meaning that VAT is already in the sticker price too)
      - rubito 8y ago
        I have never seen that happen anywhere in the EU.
      - pbhjpbhj 8y ago
        It still happens in UK (some small businesses) but AFAIK [1] it's no longer legal. It's a massive problem for businesses with lots of small transactions, if you're selling a £2 coffee and the CC processor charges 30p + 5% per transaction. Previously nearly no-one would pay the extra, now you have to cover it; so you make the coffee £2.40 ... but the large retailer with a blanket 3% transaction cost (or whatever) can undercut you by quite a lot. https://www.theguardian.com/money/2018/jun/17/credit-debit-cards-fees-costs-rules https://www.theguardian.com/money/2018/jun/17/credit-debit-c...
throwawaymjabba 8y ago
Many Indian grocery stores and some Indian restaurants in US carry a board that says minimum $10 or $20 purchase required for credit card. I guess below that amount, they don't make profit after the credit card fees. $30 is high though, never saw in any store before.
rubito 8y ago
In Spain most Chinese Euroshops will when you pay in cash not give you a receipt until you ask and then they will give excuses why you don't need one.

cco 8y ago

They are charged somewhere around 3%, it certainly adds up for an already extremely thin margin. Additionally your point about cash being less traceable is also at play, cash income is far less likely to be reported to the IRS. Add both of those factors in and it is clear to see why cash is preferred by small businesses.

flexer2 8y ago

I had a cab driver do this to me once, in 2016 or so. He dropped me off at the destination and told me it’d be $20 or whatever, cash only. I didn’t have cash on me, and said all I had was a card. He demanded that I prove I had no cash. Being a little dumbstruck and just wanting to get away from him I showed my empty wallet and he begrudgingly pulled out a phone with a square reader on it. Left a very sour taste in my mouth about cabs. It’s no surprise why Uber/Lyft are eating their lunch.

TheChaplain 8y ago
As I mentioned above, transaction fees are a killer on already thin margins. And in some states it's illegal to add a charge for the credit card transaction.
- Kalium 8y ago
  As I understand it, that's often grounds for the merchant account provider to yank your ability to accept cards at all.
rhcom2 8y ago
In NYC if you even mention the TLC their card machines will start working very quickly.
teeray 8y ago
Lifehack: offer to call the cab company on speakerphone and pay with a credit card over the phone. This usually causes the in-cab CC readers to start working again.

dba7dba 8y ago

Considering the tax loopholes and deals the super rich get, I actually have no problem with the small mom/pop shops doing what they can to get a break on the fees.

throwaway98121 8y ago
I don’t share your views. There are legitimate services we need tax payer money to fund. Tax loopholes for the super rich are a problem that should be solved, but in my opinion, that doesn’t mean we should just cancel taxation or turn a blind eye to tax evasion. We should solve the problem with tax loopholes and enforce the system for all. Mom and pop businesses or small business are very foundational to our economy. Even though individually they’re small, large scale tax evasion would be death by a thousand cuts.

zhte415 8y ago

I'm curious why you don't carry cash?

cperciva 8y ago
I have friends who don't carry cash simply because they realized that it has been years since they spent any. I do carry cash, but the only time I recall spending any in Canada in the past couple of years was when I dropped some into a charity donation "hat" -- which I knew I would be doing, so I could easily have brought some along for that purpose rather than carrying cash around all the time.
techsupporter 8y ago
It's a fair question. I'm not the person to whom you replied but thought I'd contribute my view point. I don't carry cash because it feels more cumbersome and less speedy than paying with card. With cash, I either have to work out close to exact change or--when I'm out for a leisure day and going to several places--have a mass of coins jangling around at the end. I've noticed that I'm now irrationally irritated watching someone painstakingly count out $12.83 in exact change ahead of me at the till. It also makes it difficult for me to track where I'm spending. That $60 or $100 might have gone to eating out or a bookstore or some other random place. I'd rather have the card transaction to know and categorize for sure. Speaking of denominations, I'd rather not carry much money around on me yet ATMs around me only dispense in multiples of $20 and then you get into the fun dance of how to get smaller bills if needed. So many shops now say "no change made." Finally, I put all of the spending I can (basically everything except mortgage and student loan payments) on cards for the card benefits. Miles, automatic cash back, in-store discounts, etc. Those don't happen when paying by cash. (Yes, I know, the benefits are being paid out of the transaction fees that the merchant is charged plus interest that other people pay. I'm aware that I'm leveraging that and that prices would, possibly, be lower overall if we didn't use cards or didn't have the rewards. If that day comes, I will adapt.)
- Izkata 8y ago
  No comment on the rest of it, but on this: > I don't carry cash because it feels more cumbersome and less speedy than paying with card. With cash, I either have to work out close to exact change or--when I'm out for a leisure day and going to several places--have a mass of coins jangling around at the end. I've noticed that I'm now irrationally irritated watching someone painstakingly count out $12.83 in exact change ahead of me at the till. I've actually timed the people in front of me, and the vast majority of the time, cards take nearly twice as long as cash. No idea why, as I would also expect counting out the change to more than make up for that. (I'm in the US, maybe the systems are different enough to account for this?)

TheChaplain 8y ago

The transaction costs are unfortunately not negligible for small vendors, they don't have the power to negotiate like Walmart et al.

drb91 8y ago
IME vendors simply pass the charge along to consumers these days, esepcially for small purchases.
- 1over137 8y ago
  Specifically, they pass it on to all their customers, not to only those customers using cards (doing so is against the merchant-processor agreements). i.e. those using cards are in effect increasing the price for those not using cards.
  - kmlx 8y ago
    in many places in europe there will be a surcharge added depending on the type of card you’re paying with.
    - doikor 8y ago
      And in some places in Europe that is illegal. At least here in Finland adding any hidden fees to a retail list price is illegal (meaning that VAT is already in the sticker price too)
    - rubito 8y ago
      I have never seen that happen anywhere in the EU.
    - pbhjpbhj 8y ago
      It still happens in UK (some small businesses) but AFAIK [1] it's no longer legal. It's a massive problem for businesses with lots of small transactions, if you're selling a £2 coffee and the CC processor charges 30p + 5% per transaction. Previously nearly no-one would pay the extra, now you have to cover it; so you make the coffee £2.40 ... but the large retailer with a blanket 3% transaction cost (or whatever) can undercut you by quite a lot. https://www.theguardian.com/money/2018/jun/17/credit-debit-cards-fees-costs-rules https://www.theguardian.com/money/2018/jun/17/credit-debit-c...

throwawaymjabba 8y ago

Many Indian grocery stores and some Indian restaurants in US carry a board that says minimum $10 or $20 purchase required for credit card. I guess below that amount, they don't make profit after the credit card fees. $30 is high though, never saw in any store before.

rubito 8y ago

In Spain most Chinese Euroshops will when you pay in cash not give you a receipt until you ask and then they will give excuses why you don't need one.