40 States can charge 4% on CC purchases (economy, money, California, work)
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Now this is not new per say. The CC fee was built into the prices before they tell us.
If that were the case why was there a single price for either cash or CC purchase ?
Only at gas stations have I ever seen a lower price for cash vs CC purchase.
You don't buy firearms on GunBroker much do you? Almost every seller that takes CC's charges 3%.
And if it was built in will prices come down ? I highly doubt it.
Those paying cash will pay less. The one article said this is still being appealed. I would imagine they want to see these charges removed altogether and have the CC card company charge the consumer directly which is the way it should be done. The merchant should have no part of this.
I just read that. It's very poorly written.
And the OP is misleading - states are not charging anything.
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Quote:
Starting yesterday, in 40 states, via an agreement with Visa and Mastercard,
retailers can charge, if they choose, customers a credit-card processing fee of up to 4%.
A few other articles I've now read say that so far not a single major retailer has any plans to do so.
Dang hammer! Why did you have to point this out so soon?
This thread could have gone on to the 1000's .
CC fees are not new and have been included into retailer costs.
Why should they change when they can get CC charges from everyone (cash or CC) if it's built into the retail price ?
CC fees are not new and have been included into retailer costs.
Why should they change when they can get CC charges from everyone (cash or CC) if it's built into the retail price ?
Why should cash customers subsidize credit card customers?
I checked with my merchant processor about how this would work. The sellers have to submit an application to their merchant processor so that the fee gets charged for every CC transaction. The seller can request a fee between 1.5% and 4%. The seller must post a sign at/near the register, or on the shopping cart check-out page, stating that the fee will be charged.
The vendor's CC terminal is programmed to add the swipe fee to the total amount invoiced, which can include sales taxes, shipping and handling fees, etc.
So, here are some scenarios:
Suppose a walk-in customer purchases an item from me for $100. The invoice shows $106 (6% sales tax) and I ask for the max fee of 4%. The charge on the CC will be $106 * 1.04 = $110.24.
Suppose an out of state customer purchases an item from my online store for $100 with shipping $15 via USPS priority mail. The invoice shows $115 for item + shipping, but the customer will end up paying $115 * 1.04 = $119.60.
I'm aware that shipping charges are subject to sales tax, but what's the justification? Because We Can? If I order something from a local store and they charge $10 for delivery, is that subject to sales tax?
1) as part of my Job I just talked to Visa. Credit card only, debit cards and pre-paid benefits (think your FSA/HRA cards) not impacted.
2) Merchants must contact visa to add the capability. They must put a sign at the front door, and one at the register. . .warning people to stay clear.
Visa is betting that most stores will stay clear.
Personally, these cash only business or whatever. . .seem bad at math. So lets say your slicing off 1-3% off for interchange? Really thats so bad? The carrying cost of cash (count, hold, deposit) checks and their risk, etc. . . probably isn't that far from the 1-3% that a retailer might get charged. So having a credit card saves the retailer handling. . .and they like to ignore that (because they see the 1-3% on their bill every month).
I'm in Colorado, so I don't have to worry. I don't ever shop at a place that charges extra for credit card. The prices have been adjusted to account for this charge for years, and its already baked into the price. The retailers will just absorb this fee (if they execute it) and will not turn it over to you by lowering overall prices.
I consider cash and check a suckers game. Your walking away from your discount of 1-3% on purchases (i.e. rewards card) as well as the interest earned by not having to use your cash for the grace period.
I have no problems letting the cash playing "suckers" pick up the tab. Its not my fault you don't know better.
If I were going to buy a tank of gas, I would pay entirely in $1 bills and let them have the time and hassle of counting and handling all that currency. Just my own little protest for being ripped off. Just imagine if a lot of people did that.
That's why I said basically.
No it is not a tax, but it is an expense the business is passing on to the customer.
I am assuming they are now doing this due to legislative changes in DC.
So basically this amounts to a middle class tax.
Since cash and debit customers are effectively picking up the tab for CC merchant fees, what we have now basically amounts to a poor tax.
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