advertisement
Deals | News | Forums

The Forum is sponsored by 
 

AAPL stock: $108.00 ( +1.02 )

*Cached every 60 seconds. For live updating, Click Here

You are currently viewing the Tips and Deals forum
Cash Price vs. Credit Card Price - Is it legal?
Posted by: kj4btkljv
Date: December 09, 2009 12:34PM
I'm hearing one of the owners here talking about putting a policy together for cash price and credit card price on our products. Credit card fees are biting him in the a$$, and he's looking to make up some or all of the money he's paying out for those. My question, because they're very business-unsavvy here, is this legal? We're in Illinois, and I can't find anything besides gas station stories if I Google this info?

Anybody know? Thanks!

Jeff
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: tahoedrew
Date: December 09, 2009 12:37PM
Go to almost any bar these days and you'll find most of them have implemented "minimum credit card charges," meaning you might as well drink at least $10 worth of booze 'cause you're gonna be charged at least that much!

~A
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Mike Johnson
Date: December 09, 2009 12:38PM
It's not a question of whether it's legal, it's whether it's permitted under the merchant agreement you are bound by. And it is, but only if you do it by offering a cash discount. In other words, you can't charge more than the standard, posted price.

Minimum charges are not allowed.

[usa.visa.com] See pp 9-10
[www.mastercard.com] See pp 91-92



Edited 2 time(s). Last edit at 12/09/2009 12:48PM by Mike Johnson.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: mattkime
Date: December 09, 2009 12:39PM
Its probably part of his contract with the credit card processors NOT to do this. I think bars get away with this since they typically don't have it posted.





VTPKL it!
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: mikebw
Date: December 09, 2009 12:41PM
I believe is it illegal to charge more specifically for using a credit card, however it is not illegal to charge less for cash. So as long as you make people pay the "normal" price with credit cards you can give them a discount for using cash.

Minimum charges for paying via credit are generally in violation of the terms of the merchant agreement with the credit card company. You should be allowed to charge 1 cent to your card if you want.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: AAA
Date: December 09, 2009 12:42PM
I have always wondered about the locals vs tourists two-tier pricing.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: thermarest
Date: December 09, 2009 12:43PM
What Mike Johnson said sounds like what I remember. What *should* be illegal is the card companies doing this. Its obscenely anti-competitive. It prevents any other payment processing system or company (including CASH) from competing on price.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: mikebw
Date: December 09, 2009 12:43PM
Quote
AAA
I have always wondered about the locals vs tourists two-tier pricing.

If there is no advertised price then it can be whatever the merchant decides at the very moment the customer asks. It is illegal to charge more than the advertised price, but not the other way around.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: jdc
Date: December 09, 2009 12:44PM
Quote
mikebw
I believe is it illegal to charge more specifically for using a credit card, however it is not illegal to charge less for cash. So as long as you make people pay the "normal" price with credit cards you can give them a discount for using cash.

Minimum charges for paying via credit are generally in violation of the terms of the merchant agreement with the credit card company. You should be allowed to charge 1 cent to your card if you want.

Exactly.

Just raise the prices on everything to whatever would make it profitable using a CC, then give a "discount" for using cash.

Have you guys looked into a different CC charging agency? Maybe costco?



----

The Secret Diary of Steve Jobs [www.fakesteve.net]


Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: dmann
Date: December 09, 2009 12:45PM
Jeff,
I'm on my way out the door, but IIRC, Lisa Madigan used to have something about this on the AG's website. You might want to check there or with Alvarez's office.

From what I recall, a merchant can't charge MORE if someone pays by CC, but they can offer a "cash discount." This is what most of the gas stations do.

DM

Edit: Duh. Others were quicker to the post button than I was! smiling smiley



Edited 1 time(s). Last edit at 12/09/2009 12:46PM by dmann.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: AAA
Date: December 09, 2009 12:47PM
Quote
mikebw
Quote
AAA
I have always wondered about the locals vs tourists two-tier pricing.

If there is no advertised price then it can be whatever the merchant decides at the very moment the customer asks. It is illegal to charge more than the advertised price, but not the other way around.

I have been to places where it is posted, as a two-tier price.
Also, been in the middle of a line of people (locals) and used my God-given ears to here us all buy the same thing and I was the only one charged a different price.

I just wondered about the legality of it. I actually thought the price I was paying was way below what I'd pay anyways. And never had any ill will about it at all.

Merely curious about the blatant two-tier pricing. I don't care, just curious.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: jardster
Date: December 09, 2009 12:52PM
Quote
mikebw
Minimum charges for paying via credit are generally in violation of the terms of the merchant agreement with the credit card company. You should be allowed to charge 1 cent to your card if you want.

No, you shouldn't be able to charge $0.01. That's just stupid. There is a per swipe charge (on the order of 15 cents usually), and a percentage of the whole taken. So charging tiny amounts = losing money for the business. In my office, we'll routinely ask people to not use charge cards for less than $10.



Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: mikebw
Date: December 09, 2009 12:56PM
Quote
jardster
Quote
mikebw
Minimum charges for paying via credit are generally in violation of the terms of the merchant agreement with the credit card company. You should be allowed to charge 1 cent to your card if you want.

No, you shouldn't be able to charge $0.01. That's just stupid. There is a per swipe charge (on the order of 15 cents usually), and a percentage of the whole taken. So charging tiny amounts = losing money for the business. In my office, we'll routinely ask people to not use charge cards for less than $10.

Technically, per the terms of the merchant agreement, yes you should. I'm not saying it is a nice thing to do as a customer or that it is financially viable for a merchant to allow it, but there are rules that are supposed to prevent the merchant from refusing small charge amounts.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Grateful11
Date: December 09, 2009 01:45PM
There's gas station nearby that just started giving a 9¢/gal. discount for cash, plus they are 5¢
less than everyone else around without the discount, not a bad deal saving 14¢/gal.



Grateful11
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Speedy
Date: December 09, 2009 01:51PM
I remember when not just anybody could get a credit card. You had to be semi-rich. So the middle class couldn't get a card and to keep them placated they would give cash discounts.



Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: RAMd®d
Date: December 09, 2009 02:52PM
If I recall correctly, in CA, it's illegal to require a minimum purchase amount to use a credit card.

I think the law here is the same as mentioned for credit cards- "normal"/advertised price is the CC price, discounts given for cash.

That's not too common anymore, from what I've seen. The ARCO gas stations (such as they are) only accept debit cards. One of the reasons is that they can charge a fee for debit card use, but not for CC use.



You and I have memories longer than the road that stretches out ahead.

We don’t do focus groups. They just ensure that you don’t offend anyone, and produce bland inoffensive products. —Sir Jonathan Ive

-An armed society is a polite society.
And hope is a lousy defense.

There is no safety for honest men
except by believing all possible evil
of evil men.

Pixels were born to be punished. -Frederick Van Johnson

Mister, that's a ten-gallon hat on a twenty-gallon head.

I *love* Sigs. It's Glocks I hate.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: davester
Date: December 09, 2009 03:10PM
It is absolutely a scam that the CC companies have lobbied for laws that disallow open cash vs CC pricing. What this means to all of us consumers is that ALL transactions automatically cost about 2% more than they otherwise would because the credit card price is tacked on to all pricing. Since it is automatically tacked on and the true costs hidden this results in everybody using credit cards, thereby enriching the CC companies while raising consumer prices. People who pay using checks or cash actually cost the merchant less money but are generally unable to receive credit for that. This should absolutely be illegal.




"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: M A V I C
Date: December 09, 2009 03:47PM
*burp*

Just ate lunch - Dick's burgers. Dick's is cash only. It's funny/sad to watch people pull out their cards and try to pay. Some get pissed off and say stuff like "you've got to be kidding me... it's 2009..."

Dick's charges between $1.20 & $2.40 for their burgers. If they were to accept cards, more than 10% of their revenue from the most expensive burger would go to the CC company. More than 20% from their cheapest burger.

When I went to get some food, we had to scrounge to find some cash to avoid going to the ATM. I'd much rather have to go to an ATM and get cash than have them increase prices to cover the cost of accepting credit cards.




Help MacInTouch: Buy from Amazon? use this link [amazon.com]
Mac News & Info: [macintouch.com] [macnn.com] [tuaw.com]
Mac Benchmarks: [barefeats.com]
Used Mac Stuff [FS/T]: [macswap.org] LowEndMac Swap List
Mac Software Updates: [macupdate.com]
Fonts: [dafont.com] [fontspace.com]
Online Computer Store With Mac Support: [macsales.com]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: freeradical
Date: December 09, 2009 04:08PM
When I was in Italy, only the high end restaurants accepted credit cards.

If you were staying in a hotel, you could put the meal on your bill if you weren't on a pensione plan.

It was always funny (from the perspective of an American) to see everyone pull out a wad of cash to pay for dinner.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Racer X
Date: December 09, 2009 04:10PM
MUST NOT MAKE A DICK JOKE!!!!!!!!!!!!!!!!!!!!!!!!!

I love their burgers too. Their fries are kinda limp, but very potatoey-flavored. Just sliced unpeeled taters.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: IronMac
Date: December 09, 2009 04:10PM
Quote
M A V I C
Dick's charges between $1.20 & $2.40 for their burgers. If they were to accept cards, more than 10% of their revenue from the most expensive burger would go to the CC company. More than 20% from their cheapest burger.

Actually, the CC company charges a percentage of the price.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Racer X
Date: December 09, 2009 04:13PM
Usually a flat transaction fee + a percentage. So there is a minimum amount it will never go below. 45 cents is what ARCO pays for the debit transaction IIRC.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: M A V I C
Date: December 09, 2009 04:21PM
Quote
IronMac
Quote
M A V I C
Dick's charges between $1.20 & $2.40 for their burgers. If they were to accept cards, more than 10% of their revenue from the most expensive burger would go to the CC company. More than 20% from their cheapest burger.

Actually, the CC company charges a percentage of the price.

As Racer X noted, they typically charge a fee+percentage. If you're lucky, you can get the fee down to 25¢, but often they are 30-35¢ per transaction, plus a percentage. So my numbers are actually conservative.




Help MacInTouch: Buy from Amazon? use this link [amazon.com]
Mac News & Info: [macintouch.com] [macnn.com] [tuaw.com]
Mac Benchmarks: [barefeats.com]
Used Mac Stuff [FS/T]: [macswap.org] LowEndMac Swap List
Mac Software Updates: [macupdate.com]
Fonts: [dafont.com] [fontspace.com]
Online Computer Store With Mac Support: [macsales.com]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Racer X
Date: December 09, 2009 04:26PM
For example, if you use Costco's CC transaction processing for businesses, it is 1.64% plus 20¢ for Retail Classified Transactions. That's pretty good. On-line CC transaction costs most everywhere are higher because of the greater fraud risk.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: IronMac
Date: December 09, 2009 06:28PM
Looks like the answer is: it depends:

From the Restaurant Association:

[www.restaurant.org]

From a consultant:

[answers.yahoo.com]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Wailer
Date: December 09, 2009 08:39PM
Quote
davester
It is absolutely a scam that the CC companies have lobbied for laws that disallow open cash vs CC pricing. What this means to all of us consumers is that ALL transactions automatically cost about 2% more than they otherwise would because the credit card price is tacked on to all pricing. Since it is automatically tacked on and the true costs hidden this results in everybody using credit cards, thereby enriching the CC companies while raising consumer prices. People who pay using checks or cash actually cost the merchant less money but are generally unable to receive credit for that. This should absolutely be illegal.

Absolutely 100% correct. The merchants have to assume that someone will come in and pay via credit card with a high fee (visa signature), which I is $0.15 + 2.1%, so they must price accordingly. For low margin items like groceries, the people who pay cash are subsidizing the people who pay credit.

I always pay with credit (I get 2% cash back) unless I can get a 3% or more discount for cash. Some cash only places are obviously evading taxes but that's not my responsibility.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: bwicklander
Date: December 09, 2009 08:55PM
Talking about Cash vs. Credit. I went to a restaurant a few years ago in a different city. I left a cash tip but paid for my meal with a credit card. When I was looking at my bank statement the cost of the meal was inflated. Calling the restaurant they "normally charge more than the bill" to make sure the tip is covered. A few days later it did come off my account but geesh! Never heard of that practice.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Black
Date: December 09, 2009 10:50PM
Quote
IronMac
Looks like the answer is: it depends:

From the Restaurant Association:

[www.restaurant.org]

From a consultant:

[answers.yahoo.com]

New here?
MAVIC is always right. The end.




MR/F Guestmap: [www.mapservices.org]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: OWC Larry
Date: December 09, 2009 10:55PM
Way back when laws were passed for fairness and truth in advertising cause you had companies... I remember in the late 1990s a ton of them in Macworld.. advertising pricing in big print and then having small print saying there was a 2% or 3% surcharge for using a credit card... while they advertised the credit card logos large and giant with the prices.

So... laws say you have to make it very clear a cash price is a cash price.... With gas stations I usually see the ones that do the discounting list both a cash and a credit card price.

In the print - this changed the terming where mail order places had to make it large and clear that prices (if this was the case) were after an X% discount for cash or COD.

I don't think this was anything to do with credit card companying lobbying, etc... was consumers caught up in the moment not realizing or not asking/not being told - that would find themselves with unexpected surcharges on their order invoices.



OWC Larry
Other World Computing
[www.macsales.com]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: OWC Larry
Date: December 09, 2009 10:56PM
Did they actually charge you more or was it an authorization for more? It makes sense that they'd authorize for more than tab as a standard software controlled practice since likely will be a tip on top o the tab.... I'm assuming the charge appeared for the actual and it was the authorization, which was for a little more, that fell off?

Quote
bwicklander
Talking about Cash vs. Credit. I went to a restaurant a few years ago in a different city. I left a cash tip but paid for my meal with a credit card. When I was looking at my bank statement the cost of the meal was inflated. Calling the restaurant they "normally charge more than the bill" to make sure the tip is covered. A few days later it did come off my account but geesh! Never heard of that practice.



OWC Larry
Other World Computing
[www.macsales.com]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: ADent
Date: December 09, 2009 11:06PM
I no longer tip in cash if I pay the bill on credit card - have been hit by the bonus tip at least twice (removed of course, but still a hassle).

Where do you get 2% cash back?
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: M A V I C
Date: December 10, 2009 12:34PM
Quote
Black
Quote
IronMac
Looks like the answer is: it depends:

From the Restaurant Association:

[www.restaurant.org]

From a consultant:

[answers.yahoo.com]

New here?
MAVIC is always right. The end.

Hey, if you can find me a processor that doesn't charge a flat fee + %, I'll be glad to be wrong. Especially one that charges 2.2% or less.




Help MacInTouch: Buy from Amazon? use this link [amazon.com]
Mac News & Info: [macintouch.com] [macnn.com] [tuaw.com]
Mac Benchmarks: [barefeats.com]
Used Mac Stuff [FS/T]: [macswap.org] LowEndMac Swap List
Mac Software Updates: [macupdate.com]
Fonts: [dafont.com] [fontspace.com]
Online Computer Store With Mac Support: [macsales.com]
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: Wailer
Date: December 10, 2009 03:01PM
Quote
ADent
Where do you get 2% cash back?

Schwab has a 2% cash back visa card that deposits the rebate every month into your schwab account regardless of the size. I much prefer that to having to request and manually deposit $50 rebate checks like Chase made me do.

Fidelity also has a 2% rebate card but I don't know the details. They also have a 529 plan card that's at least 2%.
Options:  Reply • Quote
Re: Cash Price vs. Credit Card Price - Is it legal?
Posted by: M A V I C
Date: December 11, 2009 04:25PM
Quote
Wailer
Quote
ADent
Where do you get 2% cash back?

Schwab has a 2% cash back visa card that deposits the rebate every month into your schwab account regardless of the size. I much prefer that to having to request and manually deposit $50 rebate checks like Chase made me do.

Fidelity also has a 2% rebate card but I don't know the details. They also have a 529 plan card that's at least 2%.

I have an Amex Cash card that's 1% back on everything, 5% back on office supplies, mobile phones and gas. Well it was 5% back on gas, but now it's 3% back.




Help MacInTouch: Buy from Amazon? use this link [amazon.com]
Mac News & Info: [macintouch.com] [macnn.com] [tuaw.com]
Mac Benchmarks: [barefeats.com]
Used Mac Stuff [FS/T]: [macswap.org] LowEndMac Swap List
Mac Software Updates: [macupdate.com]
Fonts: [dafont.com] [fontspace.com]
Online Computer Store With Mac Support: [macsales.com]
Options:  Reply • Quote
Sorry, only registered users may post in this forum.

Click here to login