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Is it legal to pass the discount onto customers? The only businesses I've seen giving a discount for paying in cash are (some) gas stations.

sanswork 12y ago
I assume it would depend on where you live but it is in the US.
- nerfhammer 12y ago
  Semantically if it's a surcharge for paying by CC it's illegal in several states, but not if it's stated as a discount for non-CC transactions. http://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statutes.aspx http://www.ncsl.org/research/financial-services-and-commerce...
colindean 12y ago
IIRC, it is now. There was a lawsuit about that in I think 2011 where merchants settled with credit card companies and payment processors that they are allowed to charge less for cash transactions. That had previously been prohibited, which was circumvented to a degree by the pervasive "minimum purchase" sign. I'm pressed for time at the moment, so I can't provide a link.
larrys 12y ago
"pass the discount" You can say "if you are dressed like a clown today we will give you a 10% discount". Point being that there is nothing to prevent you from giving someone a discount as long as it doesn't break any laws and as long as you are offering it to everyone that falls into the same category (or the discount has been negotiated).
- austinstorm 12y ago
  It was illegal until recently.
- wpietri 12y ago
  Nothing but your merchant agreement. I worked a register in a small store when I was 16, and in a slow moment I ended up reading some of the stuff VISA sent along with their booklet of invalid credit card numbers. (Yes, this was a while ago.) In in the fine print it was clear that offering your customers a cash discount was grounds for immediately canceling your ability to take credit cards. If I recall rightly, I noticed because the store I was at did indeed offer a discount. In practice, I'm sure the store was small enough that VISA didn't care. But for larger operations I'm sure it was a serious threat. I believe they were eventually sued and lost, but since I rarely see discounts like that, I imagine they have some sort of not-quite-illegal trick, like offering merchants advertising credits based on charged card volume.
venaoy 12y ago
Yes it is legal: "Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a surcharge on consumers when they use a credit card." http://usa.visa.com/personal/get-help/checkout-fees.jsp http://usa.visa.com/personal/get-help/checkout-fees.jsp
- scotty79 12y ago
  > Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005. It's good that governments still have a bigger stick they can use to beat some sense into corporations.
campers 12y ago
In Australia its common to have a surchage when paying by credit card.
- simonebrunozzi 12y ago
  Even too much. Taxis at Sydney airport sometimes charge you 10% more for using a credit card. That's legalized theft, in my view.
csense 12y ago
What rationale is there to have a law specifically about this? It seems to me like there's three contracts involved: The agreement between merchant/CC, consumer/CC, and consumer/merchant. Since these are all private parties, why does the government even care what contractual arrangements they make among themselves regarding how the form of payment affects how much needs to be paid?

sanswork 12y ago

I assume it would depend on where you live but it is in the US.

nerfhammer 12y ago
Semantically if it's a surcharge for paying by CC it's illegal in several states, but not if it's stated as a discount for non-CC transactions. http://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statutes.aspx http://www.ncsl.org/research/financial-services-and-commerce...

colindean 12y ago

IIRC, it is now. There was a lawsuit about that in I think 2011 where merchants settled with credit card companies and payment processors that they are allowed to charge less for cash transactions. That had previously been prohibited, which was circumvented to a degree by the pervasive "minimum purchase" sign. I'm pressed for time at the moment, so I can't provide a link.

larrys 12y ago

"pass the discount" You can say "if you are dressed like a clown today we will give you a 10% discount". Point being that there is nothing to prevent you from giving someone a discount as long as it doesn't break any laws and as long as you are offering it to everyone that falls into the same category (or the discount has been negotiated).

austinstorm 12y ago
It was illegal until recently.
wpietri 12y ago
Nothing but your merchant agreement. I worked a register in a small store when I was 16, and in a slow moment I ended up reading some of the stuff VISA sent along with their booklet of invalid credit card numbers. (Yes, this was a while ago.) In in the fine print it was clear that offering your customers a cash discount was grounds for immediately canceling your ability to take credit cards. If I recall rightly, I noticed because the store I was at did indeed offer a discount. In practice, I'm sure the store was small enough that VISA didn't care. But for larger operations I'm sure it was a serious threat. I believe they were eventually sued and lost, but since I rarely see discounts like that, I imagine they have some sort of not-quite-illegal trick, like offering merchants advertising credits based on charged card volume.

venaoy 12y ago

Yes it is legal: "Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a surcharge on consumers when they use a credit card." http://usa.visa.com/personal/get-help/checkout-fees.jsp http://usa.visa.com/personal/get-help/checkout-fees.jsp

scotty79 12y ago
> Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005. It's good that governments still have a bigger stick they can use to beat some sense into corporations.

campers 12y ago

In Australia its common to have a surchage when paying by credit card.

simonebrunozzi 12y ago
Even too much. Taxis at Sydney airport sometimes charge you 10% more for using a credit card. That's legalized theft, in my view.

csense 12y ago

What rationale is there to have a law specifically about this? It seems to me like there's three contracts involved: The agreement between merchant/CC, consumer/CC, and consumer/merchant. Since these are all private parties, why does the government even care what contractual arrangements they make among themselves regarding how the form of payment affects how much needs to be paid?