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It is a cost of doing business. The transaction fees aren't covered by an increase in price. They are covered by the merchant and treated like utilities, insurance and rent.
They are a fee forced onto the merchant for offering the consumer the option of credit. The problem we have is the system is controlled by a monopoly, and the banking lobby controls the government inaction.
It is positive for all involved that the major retailers have decided to take a stand and bring attention to this issue.
A man with a gun may rob a bank, but a man with a bank can rob the world.
Well that's good to hear. I would hate to think the fees are factored into the price, hence people paying cash are subsidizing the credit card users.
Back before they changed the law on this, most of the CC companies used to have in their contract for use with a business that you couldn't require minimum purchase amounts on consumers, but I always ran into problems with it. I would calmly ask if they would consider making an exception to their policy (if I didn't have any cash and needed to make the purchase), then request to speak to a manager when that didn't work because it never did. Then I would ask if they would make an exception to their policy, making the point that their use agreement stipulates that they will not enforce minimum purchases on card users. This worked every so often, but more often then not I ended up walking out letting the manager know that I would be contacting Visa and letting them know this business is breaching their use agreement. I went through all of that with the gas station just around the corner for me and they stopped the policy a month or so after I reported them.
OK. Nobody's mentioned that those evil banks guarantee payment once a transaction is authorized and have to eat all the fraud losses. How much do the retailers save by not having to write off bad checks?
I put nearly every single purchase on my credit card. Car insurance, all utilities, every single purchase I possibly can. Better for record keeping, budget tracking, and of course the credit building for the future.
Sure, no one will do this added fee to start, but just like fees on the airlines or increases in cellphone bills, once one does it, the rest follow suit before you even realize what happened.
My shovel is sharp, my pick is sharp, and my will is outstanding.
I'm okay with it. It's none of the government's business what I'm buying anyway. I try to use cash just about every where; they've got us tracked with our cell phones as it is. Yes, I'm a conspiracy theorist.
"Spartan women were known for their natural beauty... They were notorious for their razor-sharp wit and outspoken natures."
Banks don't guarantee all payments. Consumers can question any charges on their cards if they didn't authorize them, and the banks seek info from merchants concerning these transactions. If a merchant didn't do some basic signature matching, they may be liable for those losses.
Banks charge higher processing fees, and have insurance to cover losses...all of those costs are paid by merchants and consumers. You think banks are eating fraud losses? They raise their rates to cover them.
That's a bigger ripoff than ticket processing fees. It takes about 3 seconds to print out a ticket and hand it to me, yet it costs like $20 a ticket?
This is where you might see added fees...internet purchases (like Ticketmaster). Online transactions where cards are not (physically) present and merchants face even higher rates might see added fees for credit card use.
It seems like the only alternative is suicide.
RCMB Premium Poster
I was worried about you. I heard there was a flood and some hikers had to be rescued.
Like cash, sure, but Chase conveniently did away with points and rewards on their debit cards. I can only accrue them on a credit card.
I just think of it as credit cards open up a ton of customers.
If you can sell 100 widgets to cash customers, or 150 widgets to cash+credit card customers (at the same price) which do you prefer? Many retailers would prefer the sales spike. Make profit due to increased volume.
As a former Fifth Third Duo card holder, I can tell you that lots and lots of debit card transactions are run as credit. Which is why that card sucks.
Of course the fees are factored into the price. If those fees did not exist (or were lower) then the merchant would be able to offer products at lower prices. It's the same as if the insurance/rent were reduced. Lower "cost of business" = lower prices. Basic economics.
"The RCMB on 247 is one of the most awful, alarming, inappropriate, disgusting, and offensive msg boards in the history of the internet."
Glad I live in New York for this one.
...and let me guess....the pro free economy, anti-government regulation folks around here will be screaming that "the government needs to do something about this!"
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