Price is MORE with a Credit Card? - No dice!

[Turtle Club]

Wow. What was the basis of the case - how were you harmed? (Not contesting whether you were or not; again, I'm curious.)

I wasn’t harmed. I was able to subpoena the video surveillance records.

• The video shows the cashier looking at both sides of the card.
• She saw his signature on the computer signature pad. He even signed his own name.
• Since she looked at both sides of the card she saw where it said "Check ID" - However she did not.
• Also as a retailer, if the signed name on the receipt is different than the one on the card. That should throw up a red flag. She did nothing.

If it would have been a few hundred dollars charged. I would not have cared. Seeing as it was $14,000 and the cashier did nothing to check to make sure it wasnt fraud. I dont know how many times a Best Buy store has $14,000 in one sale. Not too many I would say.

A mistake is a mistake, however somthing with the circumstances they way that they were. I could not overlook them. And a jury agreed.

 

[TIMC]

Tell me you're giving a 3% discount for cash and I can live with that. Where I work I'm involved in credit card processing, and I know what accepting them costs.

Give me a price, then tell me that it will cost 3% more when I pull out the plastic and not only will you lose the sale, but expect me to rat you out to Visa and/or Mastercard just as soon as I get home.

When I was in the business I always stated clearly all prices were cash prices and credit cards required a 3% convenience fee which was in fact a 3% discount offered up front with the assumption of cash.
Sounds like you are just hung up on semantics, it is the same thing just worded different

A dealer who is willing to make 10% on a $400 cash gun sale would be $40. The customer says no I want to pay with a credit card and pay the same price I don't care if you only make $28 by loosing the other 3%. A customer like that is too cheap and impossible to please anyway, they will always find something wrong with the sale so it would not be a disaster to loose the sale. I wouldn't want a customer like that anyway and thankfully when I had my business you didn't see many of them. Usually they would get mad, whine and then call back a week or two later asking if I still had what they were looking for in stock.
Not dealing with people like that is what helped me appreciate "real" customers. My business was very successful without those people till I retired from it.

 

[drinks]

Waterhouse;
You do realize you are admitting in public that you are violating the law in Texas.
In Texas, it is actually illegal to have 2 prices.

 

[TechBrute]

Drinks, cite your source or move on.

Rezin, stop living on credit and pay cash. Or shop somewhere that has that extra 3% figured into ALL their prices. Just stop whining and telling us to tattle, whatever you do.

 

[TIMC]

Waterhouse;
You do realize you are admitting in public that you are violating the law in Texas.
In Texas, it is actually illegal to have 2 prices.

It is illegal to charge a credit card fee but it is not illegal to charge a convenience fee for using a credit card. It is all a matter of wording.

 

[rick_reno]

It's normal to pay more to use a CC.

 

[Jrm5204]

I understand why gun shops do it, but how come restraunts, stores etc. don't do it. I would imagine they pay the same fees as the gun shops.

 

[W Turner]

I have mixed emotions about this. On one hand, I understand that the margins for a small gun business are thin and that 3% can add up quick on bigger ticket items over the course of a month/year. On the other hand, having a two-tiered price structure just seems unethical, especially when the credit card agreement the participating businesses sign specifically prohibits that practice.

Call it a 3% upcharge or a 3% discount, either way it results in more money out of my pocket if the store does charge it or more money out of the store owner's pocket if he doesn't charge it.

All I ask is that they be honest about it. Don't give me a quote on a price then try to tack on the 3% when we get to the register. You do that and I will walk out and report you. Tell me upfront when you give me the quote that this price reflects a 3% cash discount or whatever and we can talk.

BTW- If you can't meet or beat an online price+shipping+transfer, then don't get pissed when I don't buy it from you either.

W

 

[HankB]

I live in Travis County, just outside of Austin, TX.

You can pay your property tax by credit card here, but they DO charge you 3% extra . . . and they don't even bother pretending that the basic tax bill is a "discount for cash."

 

[waterhouse]

Drinks, I'm unaware of this law. Can you please cite a source?

I understand why gun shops do it, but how come restraunts, stores etc. don't do it. I would imagine they pay the same fees as the gun shops.

They do pay the same fees. And those fees are built into every purchase. If you pay cash, the store gets to pocket the 3%. If you pay credit, the store sends the 3% to the credit card company.

Basically, if I priced all of my merchandice at "credit price" I would make more money. Every time someone paid credit, I would make the same as I currently do from a sale, and everytime someone paid cash I'd get an extra 3% in my pocket. Currently, I let the customer decide if they want 3% to stay in their pocket of go to the credit card company. If Drinks can find me a law, then I guess I'll just not offer a cash discount and I'll get an extra 3% on my cash sales.

Or perhaps I'll just give more negotiation room to customers who pay cash.

ETA: I just read HankB's post and it made me feel like less of a lawbreaker. On second thought, if I'm doing the same thing as the tax collectors, that probably doesn't help my case much. Oh well.

 

[antsi]

If I'm a cash customer, and the business owner's cost of doing business with me is less than a credit card customer, it's reasonable that I should pay a lower price. Whether you phrase it as me getting a discount or the card customer paying a premium is just semantics.

For those who object to this, what do you want? Should the store owner figure in the 3% credit card charges into all their prices? In that case I think the cash customer has a legit grounds for complaint. Why should cash customers have to pay 3% more for everything, just because you credit card people are fixed on using a costly method of transactions?

One way to look at it: a cash dollar is actually worth 3% more than a credit card dollar. Differential pricing is just reflecting this economic reality.

 

[Turtle Club]

If you're going to charge the 3% for using a credit card. Make it worth it to the customer. Offer them a free insoection and 2 free cleanings.

On a 1000.00 sale that would be a 30fee. I guess 30 is worth 2 cleanings and an inspection.

 

[Turtle Club]

Next merchants are going to be upset they have to get the money to the bank.

So, hey will charge a 2.75% cash transportation fuel surcharge, for having to use gas to take thier daily take to the bank,

 

[poppy]

Rezin wrote:

They wanted 3% MORE to use my debit card. They lost the sale.
I also see a lot on gunbroker sellers doing it too. Why pay an extra 2-3% on a gun?
Report em!!! This is not permitted! 1-800-VISA-911

I can see why you are unhappy, since it was a debit card you wanted to use. I don't pay an extra 2-3% on gunbroker because I use money orders. I would not report them, because all that will acccomplish is prices in general going up. You did enough, you walked away.

We have become a plastic loving society (I'm not taking about Glocks) and so we expect our local gun dealer to fall in line. Well the firearms industry is unique and we buyers are frugal folks and our history has produced a cash buying low margin culture.

There is plenty of demand, but also plenty of supply and dealers are caught between a rock and a hard place. I had never encountered this two tier pricing until I went to my very first gun show back in Feb. 1995 right before the waiting period for handguns was to take affect. I was buying as a silent protest, and after picking my piece, was told that using my credit card would cost an extra 3%. I protested because for some reason I knew that it was against CC policy to charge extra. The response was, do you want the gun or not? Since I went on the spur of the monent, I didn't have cash, and the guns were flying off the case, so I said yes.

My next purchase was from a gun store who took my credit card and did not charge extra and his pricing was reasonable but he had decided that he could not compete on the gun show circuit. I bought 6 or 7 handguns from him, because I liked his straight forward honest approach.

But I got over that and went back to the gun shows, always with cash in hand. I have never bought (except for that one time in '95) from a dealer who says he will charge me more for a credit card. I would probably buy from a dealer who posts CC prices and offers a discount for cash. Now I know is is semantics, but I don't appreciate a business person who flaunts the agreements that they sign up for.

What will happen, if this extra charge/discount/two tier system continues is that our industry will be forced into the same situation that other businesses have done, and that is to price one way and either accept cards or price one way and not accept cards.

If you think CC use is indeed universal, then I suggest that you try to buy your next car with one and see how far you get. poppy

 

[Gordon Fink]

I understand why gun shops do it, but how come restraunts, stores etc. don’t do it. I would imagine they pay the same fees as the gun shops.

Other businesses, perhaps because they do not labor under as many unconstitutional, market-destroying “laws,” realize that they can increase their volume of sales and thus overall profits by accepting credit cards graciously. However, as I illustrated earlier, a few of the less curmudgeonly firearms sellers do recognize this and offer the lower price to all customers, no doubt earning more sales than their competitors.

~G. Fink

 

[Turtle Club]

Rezin wrote:
If you think CC use is indeed universal, then I suggest that you try to buy your next car with one and see how far you get. poppy

Ahhh the Finance Charges alone would make me sick.

Seeing as how most Credit Card APRS are over 15%.

I have never had a car loan that was more than 4.9%

 

[Janitor]

If you're going to charge the 3% for using a credit card. Make it worth it to the customer.

How about they make it worth it to the customer by using a system that let's them (the customer) make a purchase when getting cash for the purchase may be too big a hassle for them for some reason? You don't consider not having to drive x miles to a bank to get money out making it worth your while, then just go to the bank, get your cash, and take the discount that goes with it.

I'm willing to bet that the VAST majority of businesses that don't "give a discount" for using cash are simply pocketing an extra 3% from each cash sale. Yet we seem to find it more palatable because they don't tell us about it.
-

 

[Hawk]

Is anybody going to point out that 3% isn't some universal constant like the speed of light or Plank's constant?

Merchant account providers compete for business just like everybody else. My primary sellers don't surcharge but neither do they pay 3%, even after all associated costs are factored in.

I don't know if they got big because they didn't surcharge or don't surcharge because they were already big. I try to stay clear of "chicken and egg" conundrums. And no, I'm not paying 3% "built into" any prices. If I was, I'd pay cash.

Sometimes I think credit card fees are like online merchant shipping charges - sometimes they reflect cost; sometimes they reflect cost, plus packing, plus time, plus gas, plus 100%.

I'm sure the smaller sellers are really paying 3%, actually a touch more, but I'd bet a donut the bigger ones are running right at 50% profit / 100% markup on their "fee recovery". Lest I offend anybody, I hasten to add that the "under 2%" crowd is likely not posting to this thread.

If everyone really was paying 3% we'd be getting the service for free after the price fixing litigation was started.

 

[308win]

Did you know it is agaist Visa and M/C policy to charge an extra fee for accepting a credit card? I noticed a few of the big shops in my area trying to do this, or requiring a minimum purchace (which is also against the merchant aggreement they signed.

Targetmasters around here lost a sale for that. I wanted a Walther P99 they had. They wanted 3% MORE to use my debit card. They lost the sale.


I also see a lot on gunbroker sellers doing it too. Why pay an extra 2-3% on a gun?

Report em!!! This is not permitted! 1-800-VISA-911

The agreement we have allows us to set a minimum purchase. If we didn't we would have morons wanting to put a $1 cup of coffe on their Visa (it has happened).

 

[strambo]

The reason it comes up more with gunstores is the margin on re-selling firearms is horribly small. 3% hurts bad when you're only making 10-20% gross profit margin. Most retail products have 50-100% or more markup. I just bought a book on retailing and in the spreadsheets for calculating how much to spend on inventory, advertising etc...it assumes a 50% markup because that's pretty standard. Local gundealers are not getting rich, it's a wonder they can stay in business. For some reason I've been crazy enough to think of trying it myself lately though.

 

[poppy]

Turtle wrote:

Ahhh the Finance Charges alone would make me sick.
Seeing as how most Credit Card APRS are over 15%.
I have never had a car loan that was more than 4.9%

Well, of course, I would not leave it on the credit card. CC's are for convenience, protection, frequent flyer miles, etc. not to actually use with whatever the interest rate is. Everyone pays off their credit cards every month, don't they? Golly, I sure hope so. poppy

 

[solareclipse]

no, they are extorting you to cover the CC fee (like some people with PP + 3.5%) and that is illegal. they cannot do that so report the store to the local financial authorities.

 

[drinks]

A 2 minute check online came up with 2 sources that state Texas and 9 other states have laws that forbid having a different credit card price than the cash price.
An attempt to claim you are giving a cash discount is not viable if the price written or quoted is stated with out the initial disclaimer.
This is fraud by deception.
I hope all of you who support deceptive pricing are blind sided at one time or another

 

[TIMC]

If you're going to charge the 3% for using a credit card. Make it worth it to the customer. Offer them a free insoection and 2 free cleanings.

On a 1000.00 sale that would be a 30fee. I guess 30 is worth 2 cleanings and an inspection.

You still don't get it! The 3% is to cover the added cost of you not using cash and getting a discount. The dealer makes no more money by you using a credit card so why should you get something for nothing? Some people are hard headed. They are just passing the savings on to you.

 

[drinks]

TIMC;
YOU do not get it, no one makes the merchant accept credit cards, they do it only to increase sales , then are not willing to pay for what they get.