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A 3% fee for a card makes perfect sense to me. That's not far off from what the merchant is losing for credit card customers, so their options are: 1. Charge

A 3% fee for a card makes perfect sense to me. That's not far off from what the merchant is losing for credit card customers, so their options are: 1. Charge the same for credit cards as cash, and make cash paying customers effectively pay more, thus applying a regressive tax to the poor (who are less likely to have credit cards) 2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash. 2 is obviously better, and I would rather go to stores that take 2 than ones which choose to charge everyone more, effectively to the detriment of those worse off.

rootusrootus 2y ago
If you charge 3% just to credit card users, they are now subsidizing the cash customers. I am guessing you are assuming the cost of cash handling to be zero.
- cute_boi 2y ago
  well they must take cash anyway, so cost of handling cash isn't that significant compared to fixed+variable cost of credit card.
  - rootusrootus 2y ago
    There is no federal law requiring a business to accept currency. You may be in a local jurisdiction with such a law.
  - ac29 2y ago
    Its been a long time since I worked retail, but I remember the costs of cash handling to be quite a bit more than you might assume: -Count cash drawers in and out for every employee, every shift -Count cash payments received & change returned -Prepare daily bank deposits -Take daily bank deposits to bank, get more change I couldnt say exactly what percentage all of that adds up to, but I could see it being 3% or maybe even more.
- FireBeyond 2y ago
  Not to mention, as someone who spent a few years in that industry, in many cases those cash customers are not getting reported to the IRS, or local authorities for sales tax. So they could already be "saving" up to 10% or more on cash customers...
cute_boi 2y ago
I think this will be solved once Credit Card Competition Act is approved. Cash isn't a solution.
bdangubic 2y ago
3% is the cost of doing business. you wanna charge customers for electricity too? what’s that - like 1% more? uniform / apron cleaning - 0.12%? anything else? :)
- TheDong 2y ago
  Electricity and so on are already included independently of the payment method. Yes, the store should be charging enough to its customers that it can afford electricity, and if it can't afford electricity, it should increase its prices. It's not worth trying to account electricity use per-customer though, obviously, and it typically won't really vary by customer much anyway. Credit card fees on the other hand do vary by customer, and can trivially be attributed to a single transaction accurately.
  - bdangubic 2y ago
    none of this makes sense of course if you want electricity, you call electric company, turn it on and you get a bill for usage. you want the priviledge of using visa at your store, you call them and get it all setup and and then you get a bill for this. it is cost of doing business and you can’t pass that shit off to customers
    - TheDong 2y ago
      What you're saying doesn't make sense. If you run a cafe, and one customer orders an espresso and the other orders a latte, are you not allowed to charge them differently? Buying milk to make lattes is also a cost of doing business, but it's a cost that is only driven by people who buy lattes, so you pass the cost of milk on to latte buying customers and not espresso buying ones, right? Credit cards are the same as milk here, only people using them cost you money. Should all foods and drinks in a restaurant cost the same because otherwise you're passing on the cost of buying ingredients and staff labor, i.e. "the cost of doing business" on to customers unevenly?
      - bdangubic 2y ago
add-sub-mul-div 2y ago
It's not whether the behavior is logical or justified. It's that fast food is no longer worth the price you're expected to pay for it. Regardless of whether it's credit card fees or labor costs or energy costs causing prices to go up, the economics of fast food no longer make sense for the customer. But also I don't understand why a cash customer paying the same price as a credit card customer should be considered paying more. The customer only cares how much they have to pay, they don't care about or feel entitled to a constant profit margin. Would a customer paying cash ever switch to credit card just because they've learned the business profits more from the cash sale? No, of course not.
- TheDong 2y ago
  > why a cash customer paying the same price as a credit card customer should be considered paying more The credit card customer gets rewards often amounting to around 2% of the value of the item. Those rewards come out of the money the merchant is paying to the credit card company. The cash customer did not get those rewards, and so paid more.
voisin 2y ago
> 2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash. Things may have changed in intervening years but about 20 years ago I owned some quick serve restaurant franchises, and the credit card companies banned charging a fee to customers for use of credit cards - there was essentially a most favoured nations clause in the agreement. If you were caught doing this they would terminate your service permanently.
- wrs 2y ago
  That was invalidated in 2013. [0] [0] https://staxpayments.com/blog/credit-card-surcharge-guidance/ https://staxpayments.com/blog/credit-card-surcharge-guidance...
bruckie 2y ago
Since most people pay with cards these days [citation needed], it seems like it would go over much better if the 3% processing cost were built into the normal price, and then you offered a 3% discount (or 2.91% for you pedants out there) for people paying in cash. The card users don't feel like they're being nickel-and-dimed, and the cash users feel like they're being treated specially.

rootusrootus 2y ago

If you charge 3% just to credit card users, they are now subsidizing the cash customers. I am guessing you are assuming the cost of cash handling to be zero.

cute_boi 2y ago
well they must take cash anyway, so cost of handling cash isn't that significant compared to fixed+variable cost of credit card.
- rootusrootus 2y ago
  There is no federal law requiring a business to accept currency. You may be in a local jurisdiction with such a law.
- ac29 2y ago
  Its been a long time since I worked retail, but I remember the costs of cash handling to be quite a bit more than you might assume: -Count cash drawers in and out for every employee, every shift -Count cash payments received & change returned -Prepare daily bank deposits -Take daily bank deposits to bank, get more change I couldnt say exactly what percentage all of that adds up to, but I could see it being 3% or maybe even more.
FireBeyond 2y ago
Not to mention, as someone who spent a few years in that industry, in many cases those cash customers are not getting reported to the IRS, or local authorities for sales tax. So they could already be "saving" up to 10% or more on cash customers...

cute_boi 2y ago

I think this will be solved once Credit Card Competition Act is approved. Cash isn't a solution.

bdangubic 2y ago

3% is the cost of doing business. you wanna charge customers for electricity too? what’s that - like 1% more? uniform / apron cleaning - 0.12%? anything else? :)

TheDong 2y ago
Electricity and so on are already included independently of the payment method. Yes, the store should be charging enough to its customers that it can afford electricity, and if it can't afford electricity, it should increase its prices. It's not worth trying to account electricity use per-customer though, obviously, and it typically won't really vary by customer much anyway. Credit card fees on the other hand do vary by customer, and can trivially be attributed to a single transaction accurately.
- bdangubic 2y ago
  none of this makes sense of course if you want electricity, you call electric company, turn it on and you get a bill for usage. you want the priviledge of using visa at your store, you call them and get it all setup and and then you get a bill for this. it is cost of doing business and you can’t pass that shit off to customers
  - TheDong 2y ago
    What you're saying doesn't make sense. If you run a cafe, and one customer orders an espresso and the other orders a latte, are you not allowed to charge them differently? Buying milk to make lattes is also a cost of doing business, but it's a cost that is only driven by people who buy lattes, so you pass the cost of milk on to latte buying customers and not espresso buying ones, right? Credit cards are the same as milk here, only people using them cost you money. Should all foods and drinks in a restaurant cost the same because otherwise you're passing on the cost of buying ingredients and staff labor, i.e. "the cost of doing business" on to customers unevenly?
    - bdangubic 2y ago

add-sub-mul-div 2y ago

It's not whether the behavior is logical or justified. It's that fast food is no longer worth the price you're expected to pay for it. Regardless of whether it's credit card fees or labor costs or energy costs causing prices to go up, the economics of fast food no longer make sense for the customer. But also I don't understand why a cash customer paying the same price as a credit card customer should be considered paying more. The customer only cares how much they have to pay, they don't care about or feel entitled to a constant profit margin. Would a customer paying cash ever switch to credit card just because they've learned the business profits more from the cash sale? No, of course not.

TheDong 2y ago
> why a cash customer paying the same price as a credit card customer should be considered paying more The credit card customer gets rewards often amounting to around 2% of the value of the item. Those rewards come out of the money the merchant is paying to the credit card company. The cash customer did not get those rewards, and so paid more.

voisin 2y ago

> 2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash. Things may have changed in intervening years but about 20 years ago I owned some quick serve restaurant franchises, and the credit card companies banned charging a fee to customers for use of credit cards - there was essentially a most favoured nations clause in the agreement. If you were caught doing this they would terminate your service permanently.

wrs 2y ago
That was invalidated in 2013. [0] [0] https://staxpayments.com/blog/credit-card-surcharge-guidance/ https://staxpayments.com/blog/credit-card-surcharge-guidance...

bruckie 2y ago

Since most people pay with cards these days [citation needed], it seems like it would go over much better if the 3% processing cost were built into the normal price, and then you offered a 3% discount (or 2.91% for you pedants out there) for people paying in cash. The card users don't feel like they're being nickel-and-dimed, and the cash users feel like they're being treated specially.