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There are rules in place that forbid charging the customer additional fees if a merchant chooses to accept the major credit cards. Small merchants sometimes get

There are rules in place that forbid charging the customer additional fees if a merchant chooses to accept the major credit cards. Small merchants sometimes get away with breaking these rules, but major firms like the ones you mentioned never would. So the choice becomes whether to accept the major credit cards at all or whether to only accept cash and debit cards and thus alienate many of their customers.

lotsofpulp 6y ago
> There are rules in place that forbid charging the customer additional fees if a merchant chooses to accept the major credit cards. This might have been true more than 10 years ago. I believe “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” invalidated card network agreements that prevented differential pricing between credit card and other payment forms, and the below ruling by Supreme Court stated the merchant can advertise the price difference however they want. https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Schneiderman https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Sch... > Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
- krustyburger 6y ago
  Interesting. I know Target in particular offers a 5% discount to users of their in-house debit card. Even if it’s within the rules, presenting customers with surcharges for using credit cards (as opposed to discounts for other payment methods) would probably still alienate many of them.
  - theturtletalks 6y ago
    Some gas stations show a cash price right on the price board. Doesn't seem to alienate customers since it's just a convenience fee in the end.
  - lotsofpulp 6y ago
    I was unaware that Target offered a Debit Redcard that gave people 5% off. It seems that this is effectively a 5% discount for using any debit card, since the Target Debit Redcard is simply linking your existing bank account and doing an ACH transfer from your regular checking account. The only caveat seems to be a $40 fee Target charges if you try to buy something with insufficient funds in your bank account, whereas purchasing directly with a bank's debit card, you can tell the bank to simply deny any transactions for more than your available balance and it wouldn't cost you anything. But if you always have sufficient cash in your bank account, the Target Redcard debit card with a 5% discount seems like a no brainer if you're not getting at least 5% cash back with a credit card. Perhaps Target does not simply offer this to all debit card users that don't sign up for the Debit Redcard per an agreement with card networks where Target gets a concession on their processing fees in exchange for not advertising a 5% discount to all debit cards uses?

lotsofpulp 6y ago

> There are rules in place that forbid charging the customer additional fees if a merchant chooses to accept the major credit cards. This might have been true more than 10 years ago. I believe “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” invalidated card network agreements that prevented differential pricing between credit card and other payment forms, and the below ruling by Supreme Court stated the merchant can advertise the price difference however they want. https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Schneiderman https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Sch... > Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.

krustyburger 6y ago
Interesting. I know Target in particular offers a 5% discount to users of their in-house debit card. Even if it’s within the rules, presenting customers with surcharges for using credit cards (as opposed to discounts for other payment methods) would probably still alienate many of them.
- theturtletalks 6y ago
  Some gas stations show a cash price right on the price board. Doesn't seem to alienate customers since it's just a convenience fee in the end.
- lotsofpulp 6y ago
  I was unaware that Target offered a Debit Redcard that gave people 5% off. It seems that this is effectively a 5% discount for using any debit card, since the Target Debit Redcard is simply linking your existing bank account and doing an ACH transfer from your regular checking account. The only caveat seems to be a $40 fee Target charges if you try to buy something with insufficient funds in your bank account, whereas purchasing directly with a bank's debit card, you can tell the bank to simply deny any transactions for more than your available balance and it wouldn't cost you anything. But if you always have sufficient cash in your bank account, the Target Redcard debit card with a 5% discount seems like a no brainer if you're not getting at least 5% cash back with a credit card. Perhaps Target does not simply offer this to all debit card users that don't sign up for the Debit Redcard per an agreement with card networks where Target gets a concession on their processing fees in exchange for not advertising a 5% discount to all debit cards uses?