I ate at a local diner last week and noticed a placard (I was sitting at the counter) stating that a 3.5% surcharge would be automatically added to your bill but if you paid cash it would be deducted. Say what?

Indeed, when the bill came, there it was: 3.5% surcharge for using plastic. I'm not pleased about this, but luckily for me I was carrying some cash -- a rarity, as 98% of the time I don't have cash on me.

I mentioned it on FB and some friends said this practice is illegal in some states (ME for instance).

Some local places made news recently because they initiated a no-cash policy, now we have the opposite. Crazy world. For as long as I remember, businesses did not tack on surcharges for plastic; they did the math, figured plastic into their operating costs and set their prices accordingly. Now my mechanic adds a surcharge for CC use.

This was a big deal with respect to gas prices a few years ago. Some states allowed gas stations to advertise and charge separate cash and credit prices; others did not.

This is why I never buy Arco gasoline.

What's the difference between a price of $102 with a $2 discount for cash, and a price of $100 with a $2 surcharge for credit? Answer: nothing. As long as customers are fully informed before they make a decision, there is no difference. Many places offer cash discounts to cover the charge they face for the credit company's middleman fee. Each firm makes its own choice how much they want to annoy credit card users.

The merchants, when accepting credit card payments, do have to fork over a percentage to the credit card companies. And let's face it, consumers also get a little kickback when using credit cards, be it "cash back bonus" or reward points or airline points or whatever. All these things cost money. It is understandable if a merchant wants the customers to pay the credit card surcharges because the merchants have to pay the credit card companies monies they that do not have to pay if the customers just pay cash.

quote:

Originally posted by Axtremus:
The merchants, when accepting credit card payments, do have to fork over a percentage to the credit card companies. And let's face it, consumers also get a little kickback when using credit cards, be it "cash back bonus" or reward points or airline points or whatever. All these things cost money. It is understandable if a merchant wants the customers to pay the credit card surcharges because the merchants have to pay the credit card companies monies they that do not have to pay if the customers just pay cash.

Well merchants also have to pay electricy, rent, insurance, equipment, depreciation, etc. Up till now I've never seen a restaurant that charges the basic, actual cost of the food with surcharges for all the overhead that goes into running the place. I can see it now:

$1.19 All-Beef Burger with Fries
x.xx Wages surcharge
.xx Electricity surcharge
x.xx Rent surcharge
.xx Insurance surcharge
.xx Equipment
.xx Heating surcharge
etc.

Besides, 10 states have made it illegal to add surcharges for CC use, so it's obviously something that bothers a lot of people.

I usually pay with my debit card and I've read in the past few days that they cannot add a surcharge for debit card use EVEN if you use it as a credit card. Go figure. So it doesn't really affect me after all. I still don't like the practice and would rather eat at a place that figures costs into the menu prices.