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Handling cash isn't 0% cost[0]. What I really mean is that government has no business telling business how to charge customers. If a company wants to mark every

Handling cash isn't 0% cost[0]. What I really mean is that government has no business telling business how to charge customers. If a company wants to mark everything up an addition 5% to "hide" credit card charges and "subsidize" them with others' payments, then they're welcome to do that, just as they're welcome to charge any markup and make any profit the market can bear. [0] The merchant is paying employees to handle it: take time to count it at the register and make change; take time to re-count a register in the back with a witness; take time to count it again before making the deposit. And actually, the bank has very detailed fees listed on commercial accounts for handling cash and checks in deposits. (The bank takes time to count it to make sure the deposit is correct.) So the "cost of a cash transaction" is greater than zero; it's the sum of all those fees divided by the number of transactions - you could even proportionally apply those fees depending on the transaction amount or possibly even the configuration of the cash (it's easier to verify a single $100 than to count 100 $1 bills, for example.)

matthewdgreen 6y ago
All of the gas stations in my neighborhood have a cash/debit price and a higher credit price. Maybe handling cash and debit cards doesn’t cost them $0, but I suspect they’re not offering this discount out of charity. The cash and debit handling costs are already reflected in those numbers.
- happymellon 6y ago
  I think it is because it is easier, as a business owner, to see someone trying to charge me for a payment method and to want to recoup that cost.
  - matthewdgreen 6y ago
    Gas stations operate in an intensely competitive environment with profit margins in the 1-2% range. Consistently across dozens of stations, both independents and large chains, I see noticeable discounts on the order of 1-2% for using cash. This isn't a question of a few owners making a mistake with numbers. I strongly suspect if you aggregate these discounts, you'll get a very clear picture of the comparative cost of cash/debit handling and credit card costs.
    - xnyan 6y ago
      Because of the environment of gas stations (easy to get in and out, open all the time, has cash on hand, not at the top of society) they typically already have really good cash handling procedures in place. They are already paying for cash to get in and out quickly and securely so I think when compared to something with similar margins and volumes like a grocery store, it makes more sense to push for more cash via discount vs a grocery store. As an anecdote, I don't think I've seen a grocery store offer a cash discount whereas I've seen it offered at gas stations frequently.
      - matthewdgreen 6y ago
        My understanding is that at least until recently, it was illegal in many states for stores to charge customers a different price for cash and credit, but that gas stations lobbied for an exemption. But I don't know the current state of the laws.

matthewdgreen 6y ago

All of the gas stations in my neighborhood have a cash/debit price and a higher credit price. Maybe handling cash and debit cards doesn’t cost them $0, but I suspect they’re not offering this discount out of charity. The cash and debit handling costs are already reflected in those numbers.

happymellon 6y ago
I think it is because it is easier, as a business owner, to see someone trying to charge me for a payment method and to want to recoup that cost.
- matthewdgreen 6y ago
  Gas stations operate in an intensely competitive environment with profit margins in the 1-2% range. Consistently across dozens of stations, both independents and large chains, I see noticeable discounts on the order of 1-2% for using cash. This isn't a question of a few owners making a mistake with numbers. I strongly suspect if you aggregate these discounts, you'll get a very clear picture of the comparative cost of cash/debit handling and credit card costs.
  - xnyan 6y ago
    Because of the environment of gas stations (easy to get in and out, open all the time, has cash on hand, not at the top of society) they typically already have really good cash handling procedures in place. They are already paying for cash to get in and out quickly and securely so I think when compared to something with similar margins and volumes like a grocery store, it makes more sense to push for more cash via discount vs a grocery store. As an anecdote, I don't think I've seen a grocery store offer a cash discount whereas I've seen it offered at gas stations frequently.
    - matthewdgreen 6y ago
      My understanding is that at least until recently, it was illegal in many states for stores to charge customers a different price for cash and credit, but that gas stations lobbied for an exemption. But I don't know the current state of the laws.