3% added credit card fee

ddraper

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Your perspective is not wrong .... for 1999. With the gig economy and places like square, intuit, etc we have fixed fee structure vs variable. In the "old days" you had to sign up with MC, Visa, Amex, Diners, etc all separately. You might get a clearing house processor like Leaders or similar that would handle it all for you (for a fee), but you still had individual accounts with every possible processor. Some had monthly fees. some had minimums. some charged fixed fee per swipe plus %. some charged a % only. The % might be fixed or it might be variable based on whether the card was basic, premium or rewards. CC processing was highly variable and expensive to manage and impossible to predict.

Then the gig economy came along. Square charges no monthly and no swipe fee, just a fixed % per swipe and a higher fixed % per key in (internet, no card, etc). It does not matter if it is a platinum Amex or a debit card, they charge the same fee. They make a lot of money on debit swipes and can lose money on the super premium swipes. Over all they make a good penny for their processing services.

Small business are better aligned with the Squares than the old school processors. Big box, restaurants, other high volume places do better on old school processors.

In the gig economy your choices are VERY limited as a gun shop. You can find plenty of old school processors that will take your business, but most of the new ones wont touch you. Paypal and Square being two of the biggest think you are selling children. I use Intuit who is fine as long as I swipe but said they would cancel my account if I ever keyed in (no selling guns on the internet they say).

So unless you know who the shop is using to process payments, you don't know their fee structure. Yes, traditional debit is same as cash, but not if you use a Gig processor. The best I can do is echeck where it is only 1% fee instead of close to 3%. Debit is still the same as credit.

Margins are not flexible enough to price everything as if it was being paid for with credit. It is not an accident that the Deli Ticket Emporium in Woburn publishes cash and non-cash prices.

My perspective is from an employee of the largest US Payment processor there is. I'm the guy writing some of the code the handles payments.

Nothing you have said is incorrect and I don't believe anything I said was incorrect. We just have different viewpoints into the system. Your viewpoint is from a small merchant perspective while mine is from a payment processor who won't touch you if you are aren't doing a million a year or more.
 

AHM

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I use to always pay cash at restaurants until the Covid thing and they started thinking cash was tainted.
Yet after the lockdown we switched to still paying restaurant bills by credit card,
but tipping in cash.

Strangely no one seems to have a problem with that.

Nothing makes a babe want to go home with you as much as the Disney Premier Visa does.
That would actually work on The Bride.
Except that she's the one with the Disney credit card.
And she already lives here.

I'm considering shipping a box of pennies next time. Loose pennies.
That can be not merely rejected as payment,
but also get you jacked up for the offense of vexatious tender.
 

Bt74

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My town has a "convenience fee" to use a credit card to pay a town bill. So, instead of paying that, I just send them a physical check using my online bank account. Costs me nothing (neither postage nor the cost of the check), but they get to manually enter all the data from the note field of the check into their systems, then get the check transported over to the bank.

'Splain to me how this saves the taxpayers money.
Hmmmm....I pay my taxes with a check. The town receives it, processes it along with thousands of other checks (I'm sure it takes all of 10 seconds per check), and does a deposit at the bank. Total cost ? Miniscule. I pay by CC, the town (taxpayers) gets whacked for 3%...$300 just to process my tax payment. Yes, I don't want to subsidize the skinflints paying by CC.
 

Bt74

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They just inflated the price so you think you got a deal. Believe me they made a profit off of you. They certainly didn’t take a loss. Sales and discounts are all bullshit to make the consumer feel happy. Manufacturers and vendors manipulate the price but are not taking a loss.
I don't disagree, OBVIOUSLY they still make a profit, they wouldn't be in business long if they didn't. BUT, I had a choice, pay by CC and pay $600 more, or pay cash and save that $600. I think I got a great deal, kitchen is rather large, 3 huge pieces of granite(had to run a double LVL perpendicular to the joists in the basement) installed for less than $6k.
 

fshalor

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So if an item is 103 bucks instead of 100 you are gonna shop around?
Considering if this is a car dealership, it's most likely $59 it you buy it from another dealership on ebay or Amazon.

The number of toyota dealerships I have purchased pars from on ebay is in the tens. Most are really fast and good.

Heck the one I've bought from the last few days times always throws in extra bolts and stickers.
 

Toast

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Hmmmm....I pay my taxes with a check. The town receives it, processes it along with thousands of other checks (I'm sure it takes all of 10 seconds per check), and does a deposit at the bank. Total cost ? Miniscule. I pay by CC, the town (taxpayers) gets whacked for 3%...$300 just to process my tax payment. Yes, I don't want to subsidize the skinflints paying by CC.
$300? You have a quarterly tax bill of $10,000? Really? $40,000 a year?

So, assuming your math is off, try again.

I send the town a check from my online bank, not from my checkbook. I don't send them the payment coupon, I just enter the account info in the memo field. My check for my bill is therefore an exception to the normal system. Someone at the town has to open their accounting system, enter my name, enter the bill number, enter the amount of the check to be credited, and then put it into the pile to be processed. Sure, a trivial amount of a tax bill, but not insubstantial on a, say, $300 excise tax bill on my car.

I pay nothing this way, not even postage. And the town gets to pay an employee to manually enter all the information, apparently because they understand incentives no better than you.
 

Rob Boudrie

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This is exactly right. The agreement with the credit card processors is that one cannot surcharge for credit.

They can absolutely offer a cash discount.
They also cannot surcharge for credit, but Las Vegas cabs all have a $3 credit card surcharge and nobody is doing anything about it.

Four seasons offers a cash/check discount. Their gun part of the business is low margin and the alternative is charging current prices without offering the discount.

I hope I can get Ben @ wcvb interested in the $3.75 door handle and steering wheel wipe fee Bernardi adds to each service call, including recalls as well as contractually free scheduled service for 2 years offered as a purchase incentive. (Breech of contract, anyone?). Take your car in for a recall and the "free" oil change and they charge the fee twice since the car is wiped down between procedures. They are not yet assessing a "courtesy greeting fee" for saying "may I help you?" when you walk in, but I expect that is not far off.

---------------------

Most towns what accept credit cards goose the price to cover the fee. Even "pay online by credit card" parking tickets generally have a "convenience fee" added to pay the intermediary that runs the online payment system. It is rare to be able to "trick" a ticket vendor like colleges; towns or stealerships into taking a credit card without an overt or covert boost in the price so you, and not them, pay the fee. Colleges don't even play the "it's not a fee, it's a discount" game; they just ignore the contract with the card issuer.
 
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Bt74

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$300? You have a quarterly tax bill of $10,000? Really? $40,000 a year?

So, assuming your math is off, try again.

I send the town a check from my online bank, not from my checkbook. I don't send them the payment coupon, I just enter the account info in the memo field. My check for my bill is therefore an exception to the normal system. Someone at the town has to open their accounting system, enter my name, enter the bill number, enter the amount of the check to be credited, and then put it into the pile to be processed. Sure, a trivial amount of a tax bill, but not insubstantial on a, say, $300 excise tax bill on my car.

I pay nothing this way, not even postage. And the town gets to pay an employee to manually enter all the information, apparently because they understand incentives no better than you.
No one said anything about quarterly taxes. I pay roughly $10K a year. $300 cost to the town to process a CC. Wow, you save a whopping 50 cents on not using a stamp?
 

Rob Boudrie

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I pay nothing this way, not even postage. And the town gets to pay an employee to manually enter all the information, apparently because they understand incentives no better than you.
When you mail in an excise or tax payment with the original bill, it is bar coded or does the account number still need to be manually entered? If the later, it's the difference between reading the memo field on the check vs. reading it off the payment stub you send in. In other words a disctinction without a difference.
 

Dennis in MA

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That can be not merely rejected as payment,
but also get you jacked up for the offense of vexatious tender.

I'll tape a Hundo to the bottom of the box. AFTER they pour out and count the pennies, some idiot will realize there's enough in there. And it took so many days, I don't have to pay for expedient processing. LOL
 

mousegunfan

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So if an item is 103 bucks instead of 100 you are gonna shop around?
No, but if it's $1000 I will take the $30.

By the way businesses already price in the 3% cost so adding it is BS. It's not like it's 1985 and cards are not widely used. These days people charge 59 cents. Young folks don't carry any cash at all.
 

CrackPot

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My perspective is from an employee of the largest US Payment processor there is. I'm the guy writing some of the code the handles payments.

Nothing you have said is incorrect and I don't believe anything I said was incorrect. We just have different viewpoints into the system. Your viewpoint is from a small merchant perspective while mine is from a payment processor who won't touch you if you are aren't doing a million a year or more.
So it is all your fault!

Neither of us contradicted the other in any way. We just have different perspectives that we are looking at the problem from.
 

CrackPot

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No, but if it's $1000 I will take the $30.

By the way businesses already price in the 3% cost so adding it is BS. It's not like it's 1985 and cards are not widely used. These days people charge 59 cents. Young folks don't carry any cash at all.
I do not price in the 3% already, but thank you for your assertion.
 

Toast

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When you mail in an excise or tax payment with the original bill, it is bar coded or does the account number still need to be manually entered? If the later, it's the difference between reading the memo field on the check vs. reading it off the payment stub you send in. In other words a disctinction without a difference.
When I run it from the online check system at my bank, there's neither a bar code nor a stub. The bank sends a check to the town with the appropriate information in the memo field as text. Were I to send the stub and my own check, there's a bar code on the stub.

The bank does have a direct transfer payment system for many creditors (as an example, all of my credit cards). Those are transferred electronically on the say I submit the request. For my town payments, it's a hard check that they mail with the info I add as a note only, as the town has its own online system, but with a fee.

Seriously, the town's way of doing it is stupid. In my more cynical moments, I think that after a nationwide search, they must have selected some old school townie as a provider.
 
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Rob Boudrie

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Why? It's the cost of doing business. Do you price in all your other overhead?
Any business that does not will fail. The issue is whether or not to apportion the overhead across all customers or those using the particular service of credit cards.

In many cases, it's better for the business to just roll it into the standard procing to preserve the illusion it is "Free" (and it is in a sense if you pay towards it, use it or not) to encourage purchases. In many businesses the profit from increased sales exceeds the cost of offering credit card use to all customers. Debit cards change the came further since the transaction fee is much lower. I've seen some businesses that take debit but not credit (first ran into this at a gas station in Vegas).

One bank I use charges $1.00 for each debit card use and encourages their customers to always use it as a credit card. I don't use that debit card, and there are geography based reasons why I have an orgs account (not Comm2a) at that bank.
 

Toast

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No one said anything about quarterly taxes. I pay roughly $10K a year. $300 cost to the town to process a CC. Wow, you save a whopping 50 cents on not using a stamp?
Forest for the trees, dude. It's not about what I do or don't save. It's that my town's "convenience fee" is such that it incentivizes me to do the thing that costs me nothing and adds costs to them.

And, yes, if the management of my town is so disconnected that they can't see the reverse incentive system they use, perhaps the CC fees will get their attention.
 

Toast

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One bank I use charges $1.00 for each debit card use and encourages their customers to always use it as a credit card. I don't use that debit card, and there are geography based reasons why I have an orgs account (not Comm2a) at that bank.
Not having to deal with that Vegas station, I have never seen a debit card as having enough of an upside to make me want to use it. That plus the occasional fraudulent CC purchase that comes by is enough to make me leery about encumbering my checking account waiting for a reversal.
 

Mark from MA

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Not having to deal with that Vegas station, I have never seen a debit card as having enough of an upside to make me want to use it. That plus the occasional fraudulent CC purchase that comes by is enough to make me leery about encumbering my checking account waiting for a reversal.
CC have way more protection up front than Debit cards...........
 

Rob Boudrie

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Not having to deal with that Vegas station, I have never seen a debit card as having enough of an upside to make me want to use it. That plus the occasional fraudulent CC purchase that comes by is enough to make me leery about encumbering my checking account waiting for a reversal.
Agreed. The big advantage for me is a smaller limit that on the credit cards and a wife who checks activity on the account daily. I never use the debit card of on-line purchases.
 

CrackPot

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Why? It's the cost of doing business. Do you price in all your other overhead?
That is extremely presumptuous of you to tell me what the cost of doing business is.

It is the cost of you using a credit card, not the cost of doing business. It is your choice to use plastic, so you can pay that cost. I will not charge my cash customers for your convenience or laziness or whatever reason you use plastic. More than 50% of my customers choose to pay cash and appreciate that product is priced to their advantage for doing so. Gun owners as a group are far more likely to use cash than the average schmuck that shops at starbucks.

It is also an age thing. The younger the customer, the more likely they are to not have cash. But given I don't specialize in cheap guns, my average customer is not on the younger side.
 

CATI

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That is extremely presumptuous of you to tell me what the cost of doing business is.

It is the cost of you using a credit card, not the cost of doing business. It is your choice to use plastic, so you can pay that cost. I will not charge my cash customers for your convenience or laziness or whatever reason you use plastic. More than 50% of my customers choose to pay cash and appreciate that product is priced to their advantage for doing so. Gun owners as a group are far more likely to use cash than the average schmuck that shops at starbucks.

It is also an age thing. The younger the customer, the more likely they are to not have cash. But given I don't specialize in cheap guns, my average customer is not on the younger side.
Curious. Do you have inflated processing rates because of the industry?
 

AJK129

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That is extremely presumptuous of you to tell me what the cost of doing business is.

It is the cost of you using a credit card, not the cost of doing business. It is your choice to use plastic, so you can pay that cost. I will not charge my cash customers for your convenience or laziness or whatever reason you use plastic. More than 50% of my customers choose to pay cash and appreciate that product is priced to their advantage for doing so. Gun owners as a group are far more likely to use cash than the average schmuck that shops at starbucks.

It is also an age thing. The younger the customer, the more likely they are to not have cash. But given I don't specialize in cheap guns, my average customer is not on the younger side.
I go out of my way to get cash before walking into that room. 3% adds up
 
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