Additional charge for using credit card
12 Jul
Majority of the stores these days accept credit cards and debit cards. While many stores still only accept cash, they do enjoy a lot of business because of dedicated customers and also because of people who carry cash. Some stores, however, accept credit/debit cards only when the customer agrees to be charged an extra “transaction fee” also. This means that customers who are not carrying cash have to either accept the extra charges since checks are usually not accepted in such places, find a nearby atm to withdraw some cash from, or find another store to do business with.
The transaction fees for using credit/debit cards are usually charged in places where most of the customers are usually in a hurry. Arco gas stations, many Carls Jr. locations, many fast food places in big food courts inside shopping malls and many drive thrus charge transaction fees for each credit/debit card transaction. These fees usually range from 50 cents to 74 cents. While that may not be a huge amount, it’s still a fee being charged as if the customer was being penalized for using a debit or a credit card.
While charging a customer extra transaction fees may bring in additional revenue, it clearly puts the customer at a disadvantage who ends up paying the extra fees and thus indirectly pays off any merchant processing fees for the store, which should be the responsibility of the store owners. If the reason for such a charge is that each credit card transaction would incur a loss if such a fee wasn’t charged, which is highly unlikely, then shouldn’t it be the company’s priority to find a replacement or a cheaper alternative to that merchant processor? That would ensure that the customer doesn’t pay more than the service they are getting in return.
Have you ever paid such a fee yourself? What do you think about it? Should such transaction fees be disputed, or do you think it’s all right to charge the fees as it might be costing the business a lot of money otherwise? What is your opinion about this?
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I always thought it was silly that someone would go to the atm to take out money when they’d be charged by it there too, and usually charged $1.50-$2 rather than like 59cents at the fast food place. Unless they’re lucky and their bank’s atm is nearby and they’re not using one of those that’ll charge them.
At the places I’ve been (including Carl’s Jr), credit cards don’t get assessed a fee and don’t require a minimum spending amount. Debit cards are the ones that require the processing fee. I think it has something to do with putting in your pin number, but that’s just the difference I observe.
I almost always have a card on me, but not always cash. Losing cash is bad. Losing plastic can be cancelled. I think I just don’t like the idea of carrying around a lot of cash either because then I know how much I have left, whereas with a card, I can just charge it and worry about it later.
hmmm :? i dunno why they do that in US..coz it’s not like that here in Canada (North America) they should be the same,no?
Well I think the reason they charge that fee is because they get charged to process those transactions. I myself have paid those fee’s at fastfood places also. I agree with it because when my clients want to use a creditcard i have to include a transaction fee for that convenience depending on how much i charge them.
Ahhhh yes, that fee should be the responsibilty of the merchants! Although, imo, the fee should not even exist! I have not encountered this anywhere myself except the DMV, so I just wrote a check there. Hubby encounters this at some restaurants up where he goes to school, but I’m not sure which ones they are…
Hi Bes,
As far as I know, depending on the volume of sales a merchant has will determine how much he is charged per transaction for accepting a credit/debit card. Let’s say most transactions at the corner store are under $10 and the merchant is paying the minimum transaction fee for each transaction. The transaction fee outweighs the worth of acceptiing the credit card. I think this is why you still see the fee being passed to the customer. It really boils down to how good a rate the merchant has with the credit card processor company.
Stacee — > Yes, losing cash is really bad, since it’s gone, byebye, adios. With a credit card, you can cancel it immediately if you have a cell phone by calling 411 to find out the number to your bank and canceling the card.
Also, you have a good point about debit cards being charged and not credit cards; I noticed that now too, but a popeyes nearby http://www.popeyes.com/ charged 50 cents for both credit cards and debit cards. I’ll try to take a picture of this next time. I think the charges should be done away with.
Jess — > You’re lucky. :p
Blastafuzix — > Yes, I agree, that’s what I said in the original post also. Since they get charged to do it, they should pay that fee on their own instead of passing the fee onto the customer.
Valerie — > Yes, I agree. It’s like charging a customer for the electricity used in a cash register, though that’s a stretch (hmmmm).
Harmony — > That’s interesting, and I agree. If they cannot afford that charge, shouldn’t they find a better merchant processor? In the long run, customer is losing more money.
On another note cellphone companies do the same thing, their service charge is for running the electricity and paying their utilites, fee’s that we shouldnt have to pay, but it happens :(
Yes, and they also pass on the so-called UTF fees onto the customers. It shouldn’t happen, but it does.
According to many state laws it is not legal to charge more for a credi transaction than you charge for a cash transaction – example Texas Finance Code section 339.001 – I am curious how Carl’s gets around this law?
Hi Terry. :) Thanks for sharing that information. I am not sure how Carl’s get around that code. Do you think California does not have that requirement? A lot of places here in California do that: they charge some extra fees for using a credit car, or they require a certain minimum amount of purchase in order to allow the customer to use a credit card.
I have also seen many gas stations in the last year charging different amounts for credit cards and different amounts for cash, for the same quality of gas. Have you seen something similar in Texas
that customers who are not carrying cash have to either accept the extra charges since checks are usually not accepted in such places, find a nearby atm to withdraw some cash from, or find another store to do business with.really somepoint of time creditcard is useful sometime it is mire problamatic also.
Thank you for the great information that can help many people.I like your article and I would like very much to read some more information on this issue.
Very interesting food for thought. I am okay with the surcharge as it facilitates the business’s ability to accept credit. I am not okay with absurd or hidden charges, however.
Thanks for the post!