Guns America & Credit Cards


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Hawkmoon
December 17, 2005, 05:24 PM
Has anyone noticed how many vendors on Guns America either add on 3% if you use a credit card, or tell you that you "lose 3% cash discount" if you use a credit card?

How does one contact Guns America to complain about thse vendors? This practice is specifically PROHIBITED by both VISA and MasterCard regulations. If Guns America is at all interested in policing their vendors, they should not be allowing the widespread use of a prohibited tactic.

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TarpleyG
December 17, 2005, 05:44 PM
It's not just GA...gun stores in general are notorious for this. I suppose it's because their markup is already so little they cannto afford the additional 3%. Where is it stated that Visa and MC forbid this? News to me but I have been out of retail a while now.

Greg

jefnvk
December 17, 2005, 05:50 PM
Using a credit card costs the store money. Hence, the 3% markup. It is quite common in many places, not just gunstores.

SIOP
December 17, 2005, 06:32 PM
So here's how this will pan out if you are successful. All the vendors will raise their prices 3% whether you pay cash or use a credit card. Good idea. So everyone will pay more, not just people who use credit cards. FYI, it isn't free for a seller to accept plastic. That's why they charge more for those that do. Also, all the major wholesalers charge more to dealers that use credit cards to purchase goods. Three percent is $30 on a $1000 gun. I don't know how much you think FFL's make on a gun, but I can assure you that 3% will make or break a deal.

By the way, your idea sounds more like communism than capitalism.

KB180
December 17, 2005, 07:03 PM
H:
I am a retailer and I sell on GA as well as other auction websites. Most dealers will charge about 3% if you use a credit card (although I don't). Yes, the dealer will be charged about 3% of the sales price by the card issuer. But in addition, there are other costs involved for the Dealer with the sale (i.e. listing fees from the auction website, shipping/insurance to both acquire and ship the said firearm, along with about a dozen other costs of doing business as an FFL Dealer). Personally, I wouldn't have a problem being charged an additional 3% for the privilege of using my credit card knowing about all the additional costs involved in being a licensed FFL Dealer. I would recommend that if you are concerned about a particular transaction fee a dealer may charge you, contact them about it and negotiate a solution...it could result in a win-win situation for both parties. Good Luck!

Standing Wolf
December 17, 2005, 07:59 PM
It is quite common in many places, not just gunstores.

I've never heard of the practice anywhere but gun shops.

hksw
December 17, 2005, 08:15 PM
The practice is the norm here in NE OH gun shows.

acdodd
December 17, 2005, 08:57 PM
Gas is less with cash than with CC.
They don't charge extra for using the card they give a discount for cash.
I think that is how they get around rules.
AC

feedthehogs
December 17, 2005, 09:32 PM
As a retailer, long, long ago all my prices were jacked up to cover my
processing fees, thus all customers, even cash, pay more for those who want to use cards.
Its a built in cost in 98% percent of everything you buy.

As a retailer you can get in serious trouble if you list additional fees related to credit card transactions. Most don't understand that fact or don't know or aren't reported to their credit card processing company.

But give them a break, it cost us money to take cards plus the risk of having someone stop the transaction on a whim, having the money yanked from our account if they got a bee in the bonnet.

You want the cheapest price, pay cash, you want to use plastic pay the extra. Most small merchants pay 2.8 to 3% so they are not making an extra profit.
If you work on a 10% margin, 3% is a lot.

How would you feel about losing 3% of your paycheck every week?

RRTX
December 17, 2005, 10:22 PM
Gas is less with cash than with CC.
They don't charge extra for using the card they give a discount for cash.
I think that is how they get around rules.
AC

I couldn't tell you the last time I saw a gas station charging more for using credit, it has to have been more than a decade ago and even then I only vaguely remember ever seeing it in the middle of nowhere. Online auctions and gun shows are about the only places I ever see this practice nowadays, even all the brick and mortar gun shops I ever go to charge the same either way.

hotpig
December 18, 2005, 12:45 AM
I doubt that the common consumer will ever believe the narrow margin that we have. I actually have been loosing money on one product that I sell. My store price is less than 1.00 per box more than I pay for it. I can not raise the price and be competitive. I only hope that the customer will buy other box or boxes of other calibers so that I can break even.

On the other hand my main competitor is on one coast and I am in the Mid West. He only takes money orders and has no web store. I take credit cards with no extra fee and have a web store. Lots of customers can buy from me at a higher price. They could pay me with a credit card (no extra fee) and still save money because of the shipping.

Now you guys see why I have a full time job. My family would be on welfare if I tried to make a living with my FFL.

jefnvk
December 18, 2005, 02:14 AM
I couldn't tell you the last time I saw a gas station charging more for using credit, it has to have been more than a decade ago and even then I only vaguely remember ever seeing it in the middle of nowhere.

No, but I have seen recently some giving discounts if you pay with cash. But again, out of the way places.

As for other places, I do remember having to pay a bit higher rate for using a credit card at an online computer store, the only other option being a Money Order, if I chose to shop there.

Matthew748
December 18, 2005, 07:34 AM
I see both sides of the coin. Credit card processing fees are no fun, but accepting credit cards allows a retailer to make additional sales that they otherwise would not make. In other words, credit cards allow a person to buy something right now that they really cannot afford. Good for the seller, bad for the individual, as they are now deeper in debt to a high interest lender. Collecting the processing fee from the customer seems like the vendor is trying to get the best of both worlds.

Maybe margins are so thin that this is necessary for the vendor to stay out of the red. I don’t know, I have never worked with a businessman in the gun industry.

Frankly, for an online firearm sale I have no problem with it because there is a little time to shift money around and get a cashier’s check, but it is a huge pain in the rear at a non-local shop or gun show. I do not carry $ 1,000.00+ in cash on me at any time and a lot of places want to hold personal checks to make sure they clear. I have passed on a couple of relatively large sales because of this.

trueblue1776
December 18, 2005, 08:15 AM
My store charges an extra 10% if you choose to pay in beaver pelts

Blackcloud6
December 18, 2005, 08:45 AM
The practice of charging someone 3% more than an advertised price for use of CC uis illegal in some states. California is one I believe.

Hawkmoon
December 18, 2005, 09:43 AM
I understand why it is done. My concern is that it violates the rules of the credit card companies, and therefore should not be allowed.
9.12.2 Charges to Cardholders
A merchant must not directly or indirectly require any MasterCard cardholder
to pay a surcharge or any part of any merchant discount or any
contemporaneous finance charge in connection with a MasterCard card
transaction.
3. The Merchant shall not impose any surcharge on sales transactions.
No Surcharging
Always treat Visa transactions like any other transaction; that is, you may not impose any surcharge on a Visa transaction.
It is true that merchants may offer "cash discounts" if the advertised price is the price for credit cards, and the offer clearly identifies the cash discount. Many of the Guns America vendors, however, don't do this. They advertise a price and then say +3% for credit cards.

That's a violation of the rules. Why is it unreasonable to ask that merchants who signed an agreement be expected to comport themselves in accordance with the rules they agreed, in writing, to follow?

Hawkmoon
December 18, 2005, 09:49 AM
I don't know how much you think FFL's make on a gun, but I can assure you that 3% will make or break a deal.
That cuts both ways. I may want to buy a gun and not have the $1000 available in cash, but I may not feel I can afford an extra 3% for the privilege of using a credit card if the merchant is not allowed by the rules of the card issuer to charge me that extra 3%. From a consumer perspective, then, the merchant can follow the rules and sell me the gun at the advertised price, absorbing the 3% as part of the cost of doing business (which it is) ... or I can walk away and he can keep the gun collecting dust on his shelf for another 6 months. That way he makes no money on it.

c_yeager
December 18, 2005, 09:53 AM
Why would Guns America care if some gun dealer in Podunk Iowa is violating their agreement with Visa? This isnt GA's problem. The only people who would consider it to be their problem are the credit card companies who made the agreement with the vender in the first place. It isnt GA's job to enforce agreements between Visa and Jim's Gun Shop.

migoi
December 18, 2005, 10:03 AM
I frequent gives a 4% discount for cash. All other forms of payment (CC, check, beaver pelts, first born children) transact out at the price on the tag.

It would seem this would be difficult to view as charging an extra fee for CC since the higher price is for all non-cash transactions.

migoi

jbear6
December 18, 2005, 10:39 AM
I'm pretty sure the adding of a 3% fee is not allowed under the merchant aggreement the retailer has with the card processer. The worst part for the retailer is two or three months down the road when someone disputes the charge on their credit card as illegitimate. The credit card processer will take the funds from the retailers bank account, and then tell the retailer about the fraudulent charge (charge-back). Any customer using a credit card has 60 or 90 days to dispute a charge (can't remember which offhand).

The "bank" (credit card processer) is not responsible for any "loss risk" in a credit card transaction, all the risk falls on the retailer. It kills me to hear all the commercials the credit card issuers put out claiming they are diligent in fighting fraud, as they could care less. The credit card processor even charges the retailer a "handling fee" in association with the fraudulent charge, so they make money even on fraud. When a retailer gets a "charge-back", it's his/her problem...period. That's a big risk.

MrChicken
December 18, 2005, 11:20 AM
I've never heard of the practice anywhere but gun shops.

It is very common at computer shows and the small computer retailers.

A local restaurant here in town charges extra for credit/debit.

hotpig
December 18, 2005, 01:18 PM
I do not charge for cc I just figure I will make less on a sale that I might not have had if I only took cash. Some times I loose money, break even, or make some. I hope that the customer will come back or tell his friends. In the long run I will come out of the hole, or go back to selling on gunbroker.

I guess in order to keep Hawkmoon happy I could raise prices.If a customer comes in and wants to haggle some I could counter. If you have cash, maybe we can work on this price. The customer that has a credit card I can just say sorry, I have to get sticker price for this.


Without doing a lot of work there is no way that the credit card processing company would act on any violation.

trickyasafox
December 18, 2005, 01:51 PM
i've never ordered a gun online. usually after the transfer fees are included its not lucrative for me to do so. that being said, even as a broke college student i'll always pay more for better service. if jim's gun shop charges 5% more, but jim is a better guy and stands by what he sells, i consider the 5% to be very worth it.:)

hotpig
December 18, 2005, 02:21 PM
I know that I have posted this before.

We are living the good old days right now.... I predict that the next decade will be hugely different than now. I not talking about fire arm laws just economics.

Right now Dealers are selling as close to the red line as they can get. It is a buyers market and there is a lot of competition. In a few years you will see the death of the gun show,most online dealers,most gun shops, and Wally World guns and ammo. If their is no money to be made they are going to stop selling.

What you will have is the multi million dollar full service gun shop,range, and gun smith. You can buy your gun, shoot at the range, get repairs and have classes all in one stop.

I ask you, will investors put their money up for almost no return? We are living the good old days right now. Gone will be the days of buying guns at or just above whole sale. 5.00 9mm ammo, a fond memory.

I think you should have more ammo but back at the end of the year, than what you had left over the year before. It is a commodity much like gold or silver. It may be a big surprise to the new shooters. Ammo will last for decades. It will do so even if not in air-condition or heated warehouses.

The price has only one direction to go. The mega gun center will not let you bring your own ammo for profit reasons..um,I mean liability. The ammo will still have great bartering power with those that are in areas that do not have these ranges.

meef
December 18, 2005, 03:20 PM
I understand why it is done. My concern is that it violates the rules of the credit card companies, and therefore should not be allowed.

It is true that merchants may offer "cash discounts" if the advertised price is the price for credit cards, and the offer clearly identifies the cash discount. Many of the Guns America vendors, however, don't do this. They advertise a price and then say +3% for credit cards.

That's a violation of the rules. Why is it unreasonable to ask that merchants who signed an agreement be expected to comport themselves in accordance with the rules they agreed, in writing, to follow?
Exactly how I see it.

What people seem to be ignoring is that when an item is posted retail, the seller can offer a discount for cash because the selling price is stated up front. How can people talk about narrow profit margins in relation to an auction? That's apples and oranges.

On an auction - there is no fixed sales price (except for minimum bid or reserve prices). Using the previously mentioned instance of 3% of $1000 is $30 - what if an item sells for $1030? The seller is then going to post another 3% on top of that. Win/win for the seller.

The sellers who charge the extra fee want it both ways. They want top dollar for their auction (every seller hopes for that, of course), then they want to nudge out a bit more.

I have done quite a bit of buying on Gunbroker.com and gotten some very nice deals. I refuse, however, to bid on anybody's auction who tries to gouge another 3% out of me after I achieve a winning bid.

I figure if you want to sell something on auction, winning bid is the price it sells for. Not that price plus 3%.

:mad:

hotpig
December 18, 2005, 04:06 PM
I understand your point. If they are going to add the 3% or what ever, I know my processing is closer to 3.5% it should be made very obvious in the auction. The bidder needs to be warned to keep the fee in mind when they bid.

Most new guns of gunbroker come from the same wholesaler. All of us dealers know what the competition paid. I find it interesting that a lot of the guns are sold right at cost. The only profit would be if they make a few bucks on the shipping or they got a sale price from the Wholesaler(normally 20.00 off the regular price). The Dealer that builds the cc fee into the price will not make many sells. Only the smart shoppers will figure the math out.

As an example I just sold a new G39 (cash sale)and profited a cool 10.68 on the deal. On a new gun that's not an impressive sell by my standard. I would have been at break even if he used Visa, or MasterCard. Up side down had he used Discover.

c3006
December 18, 2005, 04:26 PM
Send em a money order then it wont be a problem for ya!!

c_yeager
December 18, 2005, 06:14 PM
I've never heard of the practice anywhere but gun shops.

I guess you dont remember all the gas pumps in the country having a "cash" price and a "credit" price. There are still a lot of older pumps that have the slots left for both prices, and I have seen them in use untill very recently.

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