Credit card companies increase all prices. (2013, small business, transaction, expenses)

[Supposn]

Credit card companies increase all prices.

Many small mom & pop businesses are at a competitive disadvantage because their price schedules cannot support credit card handling expenses charged to the vendor. The only credit card company contracts offered to them prohibit passing fees charged to vendors from being passed onto the credit card users. . Those small businesses would profit more if it were otherwise.

Retailers must increase their prices to both users and non-users of credit cards in order to defray the credit card fees due only to credit card users. Because we’re not offered that option, we use credit cards more often and prices to all users and non users of “plastic” are increased.

Purchasers preferring to pay by credit card are under-charged and those preferring lesser cash prices are over-charged. Individual retailers should determine what if any portion of their credit card fees they should “eat” as overhead expenses.

States ignored rather than defended both vendors and purchasers from what are significant restraints of trade. Effectively almost all retail prices are now increased for the purpose of maximizing credit card companies’ profits.
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A class action suit has been settled rather than going to trial. In September 2013 a Brooklyn federal court will determine the acceptability of the agreed upon settlement between the defendants, (Visa and MasterCard issuers) and the plaintiff class of vendors that are clients of the card issuers.

Even if the court rejects the settlement, it is unlikely but Visa and MasterCard could voluntarily (as agreed within the proposed settlement) cease forbidding vendors from passing their card expenses on to the card users.
If Visa and MasterCard no longer enforce such a prohibition, competitive pressures would likely to induce similar behavior from other card issuers.

I’m not a lawyer but it’s my opinion the ten states’ prohibition of surcharge, would not apply in these cases if the vendors did not “bundle” the card charges with any other goods or services. Vendors need only itemize those charges to purchasers that explicitly choose to pay through a Visa or MasterCard card.

If the federal court’s settlement decision explicitly describes the prohibition of passing-on the fees as an illegal restraint of trade, it will apply to the defendants and to all other card issuers.

Refer to
Consumers Are The Winners In The Visa/Mastercard Antitrust Settlement - Forbes
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Respectfully, Supposn

[texdav]

Basically nothing prevent retailers from offering a cash discount. Nothig makes them accept credit or debt card sales. No more tha it forbids them charging interst on their own fiancing of items they sale. They take the charge to buisness cosr purely for one reaso that is the increased sales they see.Its really no different than mnay merchents who use to have no interest revolving accounts on motnluly bases. the cost were refelcted i the price like any other business cost.

[Supposn]

TexDav, you didn’t read or didn’t understand the referred to explanation of the drafted settlement to be judicated by the federal court?

The vendors signed contracts with both Visa and MasterCard and those card issuing companies have been enforcing those contracts.

Visa and MasterCard honor their client’s requests for payments ONLY IF the requests are from what is one of their actual clients and that client IS NOT IN BREACH OF CONTRACT. Otherwise the card issuing companies need not and will not pay venders for credit or debit card transactions based upon Visa or MasterCard credit or debit cards.

Within the drafted settlement to be judicated by the federal court, Visa and MasterCard agreed to cease their current practices and modify their current and future contracts to eliminate what the plaintiffs contend are contrary to federal laws describing and forbidding anti-trust and/or restrictions of trade practices.

Lawyers for the vendors’ class, Visa and MasterCard all agreed to the following:

Merchants will now be permitted to surcharge consumers for transactions made with (Visa or MasterCard) cards, will be permitted to band together to negotiate rates with the card networks, and also receive a temporary decrease in interchange fee rates worth another one billion dollars.

Additionally, (but not mentioned in the referred Forbes article), merchants can offer price discounts for payments more favorable than Visa or MasterCard.

If Visa and MasterCard adopt these policies, it will induce other card issuers to follow their lead. I’m not extremely familiar with that national business practices but a great many merchants within the NY/NJ area accept plastic but they do not accept American Express plastic. Apparently AMX terms are much less favorable.

If the Brooklyn federal court’s decision should explicitly identify and state that any specific card issuer’s practice is contrary to law, that would be apply to ALL card issuer’s functioning within the USA.

Respectfully, Supposn

[cdelena]

There is a lot of overhead in this world... we all wind up paying for some peoples bad checks, irresponsible returns, shoplifting, card swipes, etc. It is good people are watching things but usually anytime the government gets involved it costs us more.

Plenty of injustices in this society and truthfully retail overhead is a nit compared to many.