4 ms·

Yes, fees are capped in the EU for exemple. Considering the impact on prices, cashback is basically reverse redistribution. It makes the situation worse for th

Yes, fees are capped in the EU for exemple. Considering the impact on prices, cashback is basically reverse redistribution. It makes the situation worse for the poorest customers to give money to the banks and their richest customers.

ifwinterco 9mo ago
Yep if you use a card in the US the company just takes 2c from your left pocket and puts it in your right pocket in a form that's more difficult to use. And if you don't use a card, the business takes 2c from your left pocket and keeps it. It's a great trick though, people really buy into the whole points/cashback thing and don't realise they're being paid with their own money
- lotsofpulp 9mo ago
  It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x. Nowadays though, many sellers are offering at least 3% or higher discounts for not using credit card. My mobile network provider, home ISP, daycare and kids activities, insurance, taxes, healthcare, tradespeople, and even Target offers a 5% discount if you do not use a credit card. It’s basically only travel, restaurants, and non Target retail that earns credit card rewards. Although sign up bonuses make it worth paying the additional credit card fees sometimes.
  - veidr 9mo ago
    Well if you can get $100 worth of X on credit card for $98, but you can buy the same thing with cash for $97, aren't you actually paying 150% of the "cash back" with your own money? ¯\\_(ಠ_ಠ)_/¯
    - 46493168 9mo ago
      > but you can buy the same thing with cash for $97 Merchants rarely offer cash discounts in the US.
      - cj 9mo ago
        Except nearly every restaurant I frequent. Example menu below with cash and credit prices, credit prices being 4% more. I see this commonly. https://misslucyskitchen.com/menu https://misslucyskitchen.com/menu
        lxgr 9mo ago
        Even as somebody really disliking the current interchange fees in the US, 4% is a money grab on the merchant's side that I find hard to empathize with. Even if the merchant pays the sticker price for card acceptance, it's usually just below 3%, unless international cards are involved. Add to that the fact that cash transactions in restaurants are often accounted for in "more tax efficient ways", and it feels even more icky.
  - ifwinterco 9mo ago
    My point is if credit cards didn't exist, the $1 thing would cost 98c, so in that sense it's your money. Admittedly that is overstating it a bit because not everyone uses a rewards card. In reality the 2% cashback is 1% your own money being given back to you and 1% money from people paying in cash being transferred to you (normally regressively as someone else pointed out). If you get a discount for paying cash, then it really is just your own money
    - nozzlegear 9mo ago
      It's exceedingly rare to offer a cash discount in the US, I honestly don't think I've ever seen one in person.
      - lotsofpulp 9mo ago
        They are all over the place, especially small businesses. A cash only (paper money) price is typically less than debit card or other electronic “cash” discounts because tax evasion is assumed. Next time you have an independent contractor do some work, after they give a price, ask them if they will accept 90% or even less if you pay cash. My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price.
        jerlam 9mo ago
        I've seen it quite often for gasoline. Two sets of prices, one for credit, the other for debit/cash. I've also seen it more common as a credit card surcharge (at the bottom of a menu) than a cash discount.
        nozzlegear 9mo ago
        Like I said, I don't think I've ever seen them. For instance, you can't go into a Walmart or Best Buy and ask for a cash discount. Maybe a small business offers them, but I live in a small town (pop < 4k) and our grocery store and hardware store don't offer a cash discount. Neither do our gas stations offer a discount for paying for gas with cash, as the other reply mentions. I'm not disputing they exist, just that it's exceedingly rare and not the norm. > My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price. I'm half joking and half serious, is he intentionally trying to confuse customers? Why do Zelle/Venmo have their own prices, and what price do I pay if I just want to pay with the debit card on my phone?
  - lxgr 9mo ago
    > It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x. The counterfactual isn't getting or not getting 2% cash back, it's the merchant paying or not paying ~3% in fees, a part of which you get back from your issuing bank as a kickback to keep participating in and advocating for this scheme. Of course this would require regulatory action. Absent that, the status quo represents the stable equilibrium.
- lxgr 9mo ago
  It's usually more than 3 cents out of your left pocket and 1.5-2 into your right one, even if you do everything right and never incur interest charges or fees. > It's a great trick though, people really buy into the whole points/cashback thing and don't realise they're being paid with their own money Even better, they become poorly-paid lobbyists for the entire scheme, since it successfully makes them feel like they're getting "luxury" items/services for free by "gaming the banks", when they're really just participating in a loyalty scheme exactly as designed. Sure, it's possible to eke out a net cash profit here and there, but all in all, it's just a great counterexample to homo economicus.

ifwinterco 9mo ago

Yep if you use a card in the US the company just takes 2c from your left pocket and puts it in your right pocket in a form that's more difficult to use. And if you don't use a card, the business takes 2c from your left pocket and keeps it. It's a great trick though, people really buy into the whole points/cashback thing and don't realise they're being paid with their own money

lotsofpulp 9mo ago
It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x. Nowadays though, many sellers are offering at least 3% or higher discounts for not using credit card. My mobile network provider, home ISP, daycare and kids activities, insurance, taxes, healthcare, tradespeople, and even Target offers a 5% discount if you do not use a credit card. It’s basically only travel, restaurants, and non Target retail that earns credit card rewards. Although sign up bonuses make it worth paying the additional credit card fees sometimes.
- veidr 9mo ago
  Well if you can get $100 worth of X on credit card for $98, but you can buy the same thing with cash for $97, aren't you actually paying 150% of the "cash back" with your own money? ¯\\_(ಠ_ಠ)_/¯
  - 46493168 9mo ago
    > but you can buy the same thing with cash for $97 Merchants rarely offer cash discounts in the US.
    - cj 9mo ago
      Except nearly every restaurant I frequent. Example menu below with cash and credit prices, credit prices being 4% more. I see this commonly. https://misslucyskitchen.com/menu https://misslucyskitchen.com/menu
      - lxgr 9mo ago
        Even as somebody really disliking the current interchange fees in the US, 4% is a money grab on the merchant's side that I find hard to empathize with. Even if the merchant pays the sticker price for card acceptance, it's usually just below 3%, unless international cards are involved. Add to that the fact that cash transactions in restaurants are often accounted for in "more tax efficient ways", and it feels even more icky.
- ifwinterco 9mo ago
  My point is if credit cards didn't exist, the $1 thing would cost 98c, so in that sense it's your money. Admittedly that is overstating it a bit because not everyone uses a rewards card. In reality the 2% cashback is 1% your own money being given back to you and 1% money from people paying in cash being transferred to you (normally regressively as someone else pointed out). If you get a discount for paying cash, then it really is just your own money
  - nozzlegear 9mo ago
    It's exceedingly rare to offer a cash discount in the US, I honestly don't think I've ever seen one in person.
    - lotsofpulp 9mo ago
      They are all over the place, especially small businesses. A cash only (paper money) price is typically less than debit card or other electronic “cash” discounts because tax evasion is assumed. Next time you have an independent contractor do some work, after they give a price, ask them if they will accept 90% or even less if you pay cash. My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price.
      - jerlam 9mo ago
        I've seen it quite often for gasoline. Two sets of prices, one for credit, the other for debit/cash. I've also seen it more common as a credit card surcharge (at the bottom of a menu) than a cash discount.
      - nozzlegear 9mo ago
        Like I said, I don't think I've ever seen them. For instance, you can't go into a Walmart or Best Buy and ask for a cash discount. Maybe a small business offers them, but I live in a small town (pop < 4k) and our grocery store and hardware store don't offer a cash discount. Neither do our gas stations offer a discount for paying for gas with cash, as the other reply mentions. I'm not disputing they exist, just that it's exceedingly rare and not the norm. > My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price. I'm half joking and half serious, is he intentionally trying to confuse customers? Why do Zelle/Venmo have their own prices, and what price do I pay if I just want to pay with the debit card on my phone?
- lxgr 9mo ago
  > It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x. The counterfactual isn't getting or not getting 2% cash back, it's the merchant paying or not paying ~3% in fees, a part of which you get back from your issuing bank as a kickback to keep participating in and advocating for this scheme. Of course this would require regulatory action. Absent that, the status quo represents the stable equilibrium.
lxgr 9mo ago
It's usually more than 3 cents out of your left pocket and 1.5-2 into your right one, even if you do everything right and never incur interest charges or fees. > It's a great trick though, people really buy into the whole points/cashback thing and don't realise they're being paid with their own money Even better, they become poorly-paid lobbyists for the entire scheme, since it successfully makes them feel like they're getting "luxury" items/services for free by "gaming the banks", when they're really just participating in a loyalty scheme exactly as designed. Sure, it's possible to eke out a net cash profit here and there, but all in all, it's just a great counterexample to homo economicus.