Convenience Fees fo...
 

Convenience Fees for Credit Card Use  

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sunshinefun
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October 22, 2014 9:50 pm  

Does any know if there are merchants in the VI who have started charging Convenience Fees for accepting credit cards? Who?


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CruzanIron
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October 23, 2014 1:29 am  

Never had anyone charge after the charge yet. They wouldn't dare. It's included in the sales price anyway.


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sunshinefun
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October 23, 2014 12:14 pm  

I noticed a credit card user charge on an invoice from The Pickled Greek the last time I ate there about 6 months ago.

Convenience fees are legal in all but 10 states now but there are some terms and conditions imposed by card issuers that have to be adhered to.

I'm just wondering if anyone knows of any businesses that add a fee for using a credit card and if its widespread here in the VI.


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CruzanIron
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October 23, 2014 12:41 pm  

It's not wide spread on STX. I use a variety of cards 20-30 charges per month and have never been assessed a credit card use 'fee'.


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Uttica
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October 23, 2014 5:52 pm  

The Pickled Greek does add the charge. I'm boycotting them because of it. The owner is trying to get other restaurants to charge the fee also.


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JD on STT
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October 23, 2014 6:39 pm  

It is illegal for merchants to set minimums or charge "convenience" fees for using your credit or debit card. The merchants sign an agreement with Visa, MC etc. and if the issuing bank receives enough complaints from consumers, the merchant can lose their privileges and the business that goes with it.
If the merchant tries to charge those fees tell them it is in their contract not to charge those fees and you'll call the bank and complain.


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CruzanIron
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October 23, 2014 6:43 pm  

It is illegal for merchants to set minimums or charge "convenience" fees for using your credit or debit card. The merchants sign an agreement with Visa, MC etc. and if the issuing bank receives enough complaints from consumers, the merchant can lose their privileges and the business that goes with it.
If the merchant tries to charge those fees tell them it is in their contract not to charge those fees and you'll call the bank and complain.

The law was changed. They are now allowed to charge a fee.


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CruzanIron
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October 23, 2014 6:45 pm  

Pursuant to a settlement of the U.S. merchant class litigation, MasterCard will modify certain rules and business practices to permit U.S. merchants to apply an extra checkout fee, also known as a surcharge, to customers who pay with MasterCard-branded credit cards. The rule change permitting such surcharging will go into effect on January 27, 2013. These fees are not allowed on Debit MasterCard or MasterCard prepaid cards.

source: http://www.mastercard.us/merchants/support/surcharge-rules.html


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JD on STT
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October 23, 2014 7:15 pm  

Thanks for the heads up. Then I'll pay cash or go somewhere else. Either way the banks and the merchants lose.


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CruzanIron
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October 23, 2014 7:35 pm  

That's why they have (mostly) been smart and not charged the fee.

I have never been charged an after sales price fee.


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IslandHops
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October 24, 2014 1:46 pm  

From the vendors standpoint they take a small hit on every CC purchase. Who do you think pays for those airline miles and cash back benefits. These 'benefit' programs that make using the cards so attractive are billed back to the vendors as fees.

So the vendor has a choice. Impose a small surcharge to cover the fees for those that choose to use cards, OR, increase prices and penalize all consumers.

You always have a choice to pay cash and avoid the fee.

I think charging the fee just reminds the rest of us that there is no such thing as a free lunch (pun intended).


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CruzanIron
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October 24, 2014 1:53 pm  

Since a vendor recoups the CC companies fee by marking up the price of the products, people that pay cash are the ones that are penalized. The CC holder actually gets a discount or rewards that the cash payer does not.

So far no one has charged me an after the sales price fee for using a CC card.


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JohnnyU
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October 24, 2014 2:13 pm  

Never understood why you wouldn't frame it as a cash discount

Result is the same and avoids the negative association with fee


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CruzanIron
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October 24, 2014 2:40 pm  

I think the point of this post is being missed -

No one in the VI is charging a post sale fee except for 1 restaurant on STX.


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IslandHops
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October 24, 2014 5:35 pm  

Yep, and that restaurant has $5 gyro night. With margins that slim I don't mind paying a small convenience charge to get my gyro on.


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Uttica
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October 24, 2014 6:11 pm  

I'd rather get my gyros at paradise cafe and avoid the fee. If only to make a statement. As I mentioned before, I heard the owner of pickled greek has been trying to get other restaurants to add the fee.


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trainwreck82
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October 24, 2014 6:34 pm  

I agree with CruzanIron - it's people that don't use credit cards that are getting screwed by Visa and MC. I absolutely hate the existence of rewards on credit cards, every business in the world is factoring this into their pricing, and they're not "rewards" they're products you are being forced to buy.

I don't understand why you'd single out TPG, they're just being honest. He opened a restaurant to sell food and make a profit, not to hand over a percentage of his profits to pay for people's plane tickets.

-Former Business Owner


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Scubadoo
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October 25, 2014 2:26 am  

Merchants have benefits using the cards also. They don't have to worry about employees steeling the cash. They don't have to count it or deposit it. I was in a small mom and pop shop a week or so ago and the owner mentioned he needed ones. His bank that he has his account with charges him 50 cents for a pack of 50 ones.


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JD on STT
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October 25, 2014 2:08 pm  

From the vendors standpoint they take a small hit on every CC purchase. Who do you think pays for those airline miles and cash back benefits. These 'benefit' programs that make using the cards so attractive are billed back to the vendors as fees.

So the vendor has a choice. Impose a small surcharge to cover the fees for those that choose to use cards, OR, increase prices and penalize all consumers.

You always have a choice to pay cash and avoid the fee.

I think charging the fee just reminds the rest of us that there is no such thing as a free lunch (pun intended).

No one is holding a gun to their head to accept credit cards. It's called the cost of doing business.They do it voluntarily and they sign an agreement with the bank so they know up front about transaction fees. If they don't like it they can opt out and accept only cash. Then they'll lose 90% of their business. They just want to pad their income with convenience fees.
Boo-Flippin-Boo-Hoo. The poor banks and people that continue to let themselves be hosed by them.


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ChrisMI
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October 25, 2014 6:02 pm  

We're all talking about 3%, right? Tiny enough that almost no one charges customers for it as an add-on, and also small enough that if a cheap place charged you 15 cents to charge your $5 gyro it'd be no big deal too, right? Did they change it to 10% and I missed it?


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CruzanIron
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October 25, 2014 8:07 pm  

JD, for your info, I've made more money FROM my bank than they ever got from me.
You just have to know how to work the system.

Thank you for paying in cash. You pay a price marked up to cover the merchant fee.
That comes right back to me as a cash back reward when I use my cards.


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Scubadoo
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October 26, 2014 3:23 am  

Last I knew Amex fees were something like 6%. Hence the reason many merchants don't take Amex. No big deal, most people have one of the other cards.


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STXBob
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October 26, 2014 10:20 am  

Amex charges restaurants 3.5% http://blog.unibulmerchantservices.com/american-express-merchant-fees/?PageSpeed=noscript

I think the average for Visa/MC is 2.5% to 3%. It varies by bank.

In the 1980s, the fees used to be much farther apart, which led to some merchants not accepting Amex. From http://en.wikipedia.org/wiki/American_Express#.22Boston_Fee_Party.22 with emphasis added: "...several restaurants in Boston started accepting and encouraging the use of Visa and MasterCard because of their far lower fees as compared to American Express' fees at the time (which were about 4% for each transaction versus around 1.2% at the time for Visa and MasterCard). A few even stopped accepting American Express credit and charge cards."


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JD on STT
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October 26, 2014 1:28 pm  

JD, for your info, I've made more money FROM my bank than they ever got from me.
You just have to know how to work the system.

Thank you for paying in cash. You pay a price marked up to cover the merchant fee.
That comes right back to me as a cash back reward when I use my cards.

I only pay cash when there's a convenience fee. Which is almost never.


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CruzanIron
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October 26, 2014 2:29 pm  

JD, for your info, I've made more money FROM my bank than they ever got from me.
You just have to know how to work the system.

Thank you for paying in cash. You pay a price marked up to cover the merchant fee.
That comes right back to me as a cash back reward when I use my cards.

I only pay cash when there's a convenience fee. Which is almost never.

My apologies, then. I thought you were against credit cards. I see different after my re-read.


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