I'm just wondering what the consensus is on this. We ordered pizza and some apps for dinner last night. I placed the order over the phone and my husband went to pick it up. We've ordered from this place plenty of times, probably once a month. When my husband showed up to pick up the food there was a sign that they were now charging a "4% convenience fee for using a credit card". I was given no warning of this when I called to place my order, they have not updated their online menu to include this information, and no where on their website or facebook page is this included, so literally, there was no way to know this until walking in to the establishment, and of course my husband only had a credit card with him. I'm on admin on a local restaurant review Facebook page and posted about this new fee as an FYI to locals. The comments are very divided over whether or not it's okay for a business to pass along this fee directly to their customers in this manner. My opinion is that credit card fees are a cost of doing business just like payroll taxes, rent, supplies, etc and that a business should price their product and/or service to cover all of these things, not every one agrees with me.
Post by penguingrrl on Feb 21, 2020 8:26:05 GMT -5
I’m not a fan. In fact, there’s a diner near me that started doing that so I stopped going to it. It’s a cost of doing business, and should be built into prices.
Nope, this is the cost of doing business in an economy where most people use credit cards.
They would be better off raising prices and just incorporating the fee that way. People don't like having an additional cost pointed out to them on top of their bill.
Post by countthestars on Feb 21, 2020 8:29:44 GMT -5
I agree with you. I actually thought they couldn't do that, but I could be wrong. There are a few gas stations near here that charge you a fee for CC if you spend less than $10 or $20. Annoying.
As a small business, I charge 3% if you want to use a credit card. My business is not like a restaurant so I don't have transactions everyday. It is really an option for people to save money by paying cash or check. I could add 3% across the board to my prices but 99% of my clients pay with check so I don't feel the need.
Post by Patsy Baloney on Feb 21, 2020 8:30:15 GMT -5
I agree that it’s a cost of doing business, as well as the assessment that it would be better to minimally increase the cost of items on the menu to incorporate the cost rather than put a flat 4% fee on an order.
I’ve been to restaurants where it is cash only. If credit card fees are making your model unsustainable, I suppose that’s an option, but really, I would think there was an issue with pricing, not fees incurred.
I don't like it personally, because I rarely have cash, but I understand why a business would do it. My daughter's theatre charges a 5% fee for class registrations paid w/a CC (but no fee for show tickets). It's a pain writing a check but worth it to save that $$.
Gas stations always seem to have a cash vs. CC price.
I agree with you. I actually thought they couldn't do that, but I could be wrong. There are a few gas stations near here that charge you a fee for CC if you spend less than $10 or $20. Annoying.
You used to not be able to add the fee, but the law changed several years ago.
It doesn't bother me. It is so hard to run small businesses these days. I just grab cash when I go to these places. Its not ideal but all of these local businesses that either charge a fee or straight up, don't accept credit cards are owned by local residents.
The business definitely has to pay a percentage to the credit card company. I have seen several small businesses that pass this fee on to the consumer, and several that don’t. I understand it’s frustrating that there was no notice of the new fee until he got to the restaurant, but it’s not the sellers fault that he didn’t have cash.
Post by lemoncupcake on Feb 21, 2020 8:42:16 GMT -5
Because of a change in rules by the card brands, this is going to become more common. I don’t like it, but I get it - especially for small businesses.
But they are required to disclose it (signage in a physical location and a line item at payment approval) so if they aren’t, then you have an in to argue for a refund of the fee.
Eta: they can’t surcharge for debit cards though, so that’s a good alternative if you don’t have cash or want to buy online.
I’m ok with small businesses setting a minimum for using a card. The Indian grocery store I used to frequent had a $20 credit card minimum. But I don’t think it’s ok to set a percentage fee no matter the cost of the order. I don’t know what the fees are exactly, but 4% seems really high. They have to be profiting on that.
I get that some businesses, especially small businesses, feel the need to do it. If the fee isn't significant amount of money for me, I'll still support a local business I like even if it costs an extra fee (and I'm often willing to pay the fee for the convenience of using a card). Obviously no one likes paying more, but whatever, as long as the business is transparent about it I don't think it's unreasonable. The lack of transparency would bother me in this situation. Especially if it's a new policy, they really should be letting customers know.
In CO there's a statute that makes charging more for a credit card against the law, but it's okay to offer a cash/check discount.
In my experience, many people don't realize how much it costs for a business to accept credit cards. In price sensitive industries, like food, gas, etc., I think it's more difficult to add an extra 3-5% for credit cards. Food costs have increased dramatically recently for restaurants. I'm not surprised that many places can't absorb it any longer and are reticent to raise prices across the board. Credit card companies suck for consumers and merchants but consumers just see the miles/perks/cash back/free travel.
Based on posts from other boards, people here don't seem as annoyed if contractors give a discount for cash/check payments.
I’m ok with small businesses setting a minimum for using a card. The Indian grocery store I used to frequent had a $20 credit card minimum. But I don’t think it’s ok to set a percentage fee no matter the cost of the order. I don’t know what the fees are exactly, but 4% seems really high. They have to be profiting on that.
Square just changed their fee structure. I'm not surprised if other processors are changing their fee structures too. There might be a slight buffer at 4% but not much.
I just started doing sales part time for a flooring company. It’s all from home and I manage my own profit margins. While some people push the envelope to get as much as they can, I try to go lower than most to get the sale, and hope for repeat/referral business. We do have to charge 3% for credit cards. One salesperson just adds it in and then it appears there’s no fee, and if the customer pays by check she gets an extra 3% profit. I don’t because it raises my prices, sometimes by hundreds of dollars. Thoughts?
FTR, I always tell people on my proposal that there is a fee for CC.
Post by Leeham Rimes on Feb 21, 2020 9:03:15 GMT -5
As a small business owner, credit card processing fees are absolutely outrageous, so we don’t take credit cards. Luckily, we have insurance companies and attorneys as our clients, so they always pay by check anyway. We’d have to raise our prices significantly if we had to take CCs. Last time I used square, I wanna say it just slightly under 4% plus a ten cent fee on top of that. It may go down with volume, but since we dont need to take them, i never looked into it.
I dont like paying those fees myself, so I feel conflicted. I get it why they do it but as a customer it’s annoying. On the flip side, when/if they raise their prices, people complain about that too, It’s likely a no win situation. It’s hard for small businesses to absorb some costs vs. a national place, like papa johns. I know the owners of our local pizza place are not swimming in money, they work 7 days a week and almost the entire time the place is open.
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Post by Jalapeñomel on Feb 21, 2020 9:06:53 GMT -5
All the little bodegas in the Bronx do this, and many other little mom and pop joints.
My son’s after/before care charges a fee for credit cards, and it really enraged me. I’m already paying $600 a month, let me get my rewards by using my card.
Post by litskispeciality on Feb 21, 2020 9:07:26 GMT -5
I hate when places only take cash or charge you more/a fee for using a card. I never carry cash. We've driven away from a couple of places because I don't want to pay an ATM fee to get cash, then I'm paying the fee in a different way. If they're up front I guess you know to plan for it, but it's still annoying. We love a local diner, who advertises they really want cash as to not raise prices (to cover the fee for cards), but again I have to make an effort to get cash, or not go. I know it hurts the business to pay the fee, but I don't think it should go to the customer.
I think the difference with a contractor, dentist (I know you didn't mention that one) etc. giving a cash discount is that it's a big fee and so it seems more rational. They just want the money instead of waiting for a check/card to clear, or waiting for insurance. Also the contractor would then spend (some) of that money on materials instead of paying out of their pocket and waiting to pay themself back.
I also have a huge issue with ATM fees. I posted the other day that we have to change banks because ours is adding more and more fees, it's just a huge PITA to change everything over. Apparently my bank even charges a balance inquiry fee for using a non-brand ATM. I found out when I accidentally did a balance inquiry and had to call to remove the $3 fee. I'm sure they think I could just go online and check the balance, but this was just a stupid way to take my money.
I don't have an issue paying with a check for a service. But things like shopping and restaurants are different imo. I don't carry cash and ATM withdrawals cost me a fee. I could switch banks but it is easier to switch restaurants so I'm more likely to avoid a place that won't take my preferred payment method. If they want to do that I can't fault them, but they should be aware that they will lose a lot of people in this credit card heavy purchasing environment.
I also use a CC for points so I don't even keep much cash in my checking account, so switching to a debit card doesnt appeal.
Post by Wines Not Whines on Feb 21, 2020 9:40:05 GMT -5
I’ve seen small businesses do this for small amounts, under $10 or $20. I’m ok with that, but it’s annoying when companies do it for all purchases. Most people don’t carry around large amounts of cash.
I don't care. I figure I'm going to pay for it someway, because using cc's costs money on the business side. I'm paying for the convenience of using a card. If anything, I'm annoyed that cc's are charging business owners for the privilege of accepting their precious, money making cards.
I don't care. I figure I'm going to pay for it someway, because using cc's costs money on the business side. I'm paying for the convenience of using a card. If anything, I'm annoyed that cc's are charging business owners for the privilege of accepting their precious, money making cards.
I agree with this...I’d prefer they just add an extra 50 cents to their prices vs do it at the end, but I rarely have cash on me and if it costs me 75 cents on a $25 bill, I’m not going to argue about it. But I won’t pay $2 to use an ATM so obviously a disconnect there.
When I owned a restaurant my merch fees were just build into menu prices. Most of the transactions were debit or credit card so it was around $1,500/m in fees. I would have lost a lot of business if I added that fee to the tabs. Although adding it to some people’s bills would have made me smile.