Credit card surcharge

How do you react to credit card surcharges?

The Man The Man
Aug '23

What I am talking about is the surcharge that a lot of restaurants are passing on to the patrons.

The Man The Man
Aug '23

I think it’s a bunch of BS, it’s the cost of doing business.

Hadenough Hadenough
Aug '23

It's a turn off.

Luca2 Luca2
Aug '23

I think it’s a money grab. It’s the cost of doing business, just suck it up. I make a mental note of establishments that charge extra and we definitely shy away from going there. However, given the choice of paying the surcharge or using cash, I’ll pay the surcharge every time. I refuse to pay cash since it forces (I think) the business to claim it for tax purposes. I pay a ton in taxes and can’t stomach the thought of cash-based businesses not paying their fair share.

FarmerJake FarmerJake
Aug '23

Use a Debit card! same as cash.

It doesn't bother me. If the restaurant doesn't recoup credit card fees with a surcharge, they'll just add it to the price of the food. This way, we have the option of paying cash.

Courtney1 Courtney1
Aug '23

I have no problem with it, it's business. For them to gross the same amount from a credit card user as from a cash user, they have to pass on the CC fee. It's simple math.

I guess they run the risk of someone not dining there because of the extra 3% (or whatever it is), but I think it's wrong for the user to expect the business to pay it... if you don't want to pay the 3%, use cash. YOU always have the option of using cash.

JeffersonRepub JeffersonRepub
Aug '23

Yes I agree we have to pay it either way... A surcharge or included in the cost. But would you want a surcharge for rent expense? Labor? Marketing? 10 other surcharges that add up to the cost? Just factor it into the prices please.

Scott Scott
Aug '23

I agree "It's the price of doing business" They need to be profitable and are on a tight budget. I also need to follow a budget in order to maintain my household expenses. So, the way I deal with the "Credit Card surcharge" is to reduce the amount I tip. I used to leave 20% now I leave 17%. Before everyone jumps on me "the staff needs tips to survive" let them take it up with thier boss. I can pay cash, sounds good if you're going to McDonalds, but if I am at a fine restaurant, I don't usually carry a few hundred dollars in cash.

Some businesses in our area (Arizona) provide a cash discount if you don’t use a credit card. We went out for breakfast Wednesday, knew to bring cash, and the small locally owned restaurant didn’t pay for the credit card service and we had a small discount off our breakfast.

It’s going to get paid in one way or another.

Peggy C. Peggy C.
Aug '23

Re: Credit card surcharge

Debit card purchases will cost a smart restaurant owner 1.8% and maybe even less. I owned a business for 15 years and all debit, visa, Amex combined cost me under 3%. Instead of passing it in to the consumer they should negotiate a better rate with their cc provider. It’s all negotiable.

Hadenough Hadenough
Aug '23

"Just pass it along in the price." But if I'm paying cash, why should I
pay a cost that doesn't apply?

I usually go out with some friends, and we all kick in some cash, based
on the price of what we each ordered. Simple enough. We can't all pay
by separate credit card charges.

James E Beckman James E Beckman
Aug '23

Agreed that providing a "cash discount" has better optics than a "credit card surcharge", even though it's exactly the same thing...

ianimal ianimal
Aug '23

Except for credit cards with Cash Rewards - which can offset those surcharges with 2% back in cash or more in cash credits (particularly those Restaurant category cash back cards)
Aug '23

What's next? Restroom surcharge? Cooling and heating surcharge? Maintenance and supplies surcharge? As someone posted, it's a money grab. Credit card fees historically have been baked into the Cost of Services to operate a business.

dan l dan l
Aug '23

my hairdresser charges like a 4% surcharge. i forgot 2x to bring my checkbook! ugh.

Hackresident Hackresident
Aug '23

does this apply to using a debit card vs. a credit card?

Pumpkin43 Pumpkin43
Aug '23

I for one if you charge me a surcharge for buying at your store, dining at your restaurant or using your services I will choose to go to another establishment that does not do this. The cost of doing business has gone up granted. So now the customer has to pay a higher price for goods and services. The proprietor now wants you to PAY for the cost them doing business with the banks. Then the banks want you to pay interest from 22% to 30% if you can't pay in full. When will it finally stop?

Stewart Stewart
Aug '23

Pumpkin yes debit cards are surcharged as well

Hadenough Hadenough
Aug '23

Stewart, you still pay the surcharge whether you’re aware of it or not. It’s part of overhead.

3wbdwnj 3wbdwnj
Aug '23

Just build it into your cost. As a customer I don't want to see it added onto the bill. It looks tacky and cheap. I already am dining at a restaurant who has probably raised their prices to beyond absurd for the same or lesser quantity I'm getting. I just want to dine out, so I accept the cost. For me I will scrutinize the food and service much harder after seeing it on the bill.

Everything is over priced, do we really need to pay more to use credit? I started paying in cash at a local pizza shop to avoid their credit card fee and I try to avoid paying extra on top of all the inflation costs. I used to use debit card all the time but I’ll gladly go back to cash to avoid paying extra. It’s no longer convenient.

Aug '23

I agree that paying more for anything than before sucks...BUT I think there is a misunderstanding here by a lot of people- with commentary of 'money grab'.

The business is NOT making any more money by charging a CC fee. They are just not losing money.

To run a credit card- the business pays a transaction fee to run the card, plus pays a % of the charge in addition. And that isn't even considering to have a merchant account- the store had a monthly fee even if they don't run a single card- as well as equipment.

So when for example Dan says above-

"The proprietor now wants you to PAY for the cost them doing business with the banks. "

It is YOU Dan- that are forcing the business to do business with a bank.

How it should go-

I have an apple- I tell you I want $2 for it.

You can hand me $2 and we are done.

But- you want the apple now- and YOU don't have cash- so you say- here take this piece of plastic- don't worry, the plastic company will pay you in a couple days, nevermind that they will take some of it from you...and you will have more paperwork...but hey, I get my apple now, not my problem.

You have a credit card- that allows YOU to buy something without actually paying for it at the time of purchase- and that shouldn't be their problem / expense you don't have the money now and need to use credit.

The only reason people get upset is most don't understand and just think 'another fee'...when in reality it should have ALWAYS been the customers responsibility to pay for the additional cost CAUSED BY THE CUSTOMER.

For some dumb reason it was illegal to pass on the burden of cost to who rightfully caused / deserves it until not too long ago... and apparently there is much confusion.

For everyone that says- 'add it to the cost'- well it's a % so the higher the cost- the more the CC company takes... so that is not the answer. There is no way to raise price to break even.

That was the best explanation I have seen. Never thought it through like that. Credit cards do make it possible for a business to sell more of their product nor services, so both benefit. Sharing the extra cost between buyer & seller seems fair.

Lonesome Dove Lonesome Dove
Sep '23

Josh - I appreciate your detailed explanation….although I take a little offense to “most don’t understand”. I fully understand the way it works - and I still say it’s a money grab. The credit card fees have been included in the cost of doing business for years. When restaurants decide to start charging the credit card fees do they lower all prices on the menu by the same amount? Of course not.

Bottom line - eating out is quite costly and I know it doesn’t make sense to worry about a few percent. But, for some stupid reason I find the surcharge tacky and unnecessary.

FarmerJake FarmerJake
Sep '23

"The credit card fees have been included in the cost of doing business for years."

No it hasn't. As Josh explained, it's an undetermined number. You would have to be clairvoyant to know how many people would use a card and how much those charges would be in order to bake that cost in.

The only thing that they could possibly have accounted for is the monthly fee the processing (not credit card) company charge. Which are def a ripoff.

Square charges 2.9% plus .015 per transaction with card present. Obviously the fee would be higher if someone bought 100 apples as opposed to the person that bought 10. How do you adjust the product price to account for that?

There was also the issue of each card wanting a different percentage and why businesses wouldn't take certain cards. If I remember correctly, back in the 80s, AmEx wanted 3.5% while Visa/Mastercard was only around 2.5

" and I still say it’s a money grab. The credit card fees have been included in the cost of doing business for years."

For years when the dollar was worth more, and we didn't have runaway inflation from a pandemic or poor fiscal policies. Everything costs more these days, because the dollar is worth less. That's just a fact. Don't want to pay it? Eat somewhere else (or buy your gas, or whatever).

JeffersonRepub JeffersonRepub
Sep '23

Many of us do eat somewhere else. And many of us buy gas where cash and credit are the same. And Josh, most of us do understand how it works. We are just debating the issue because someone brought it up.

Whip...You don't have to be clairvoyant to know your processing fees. You have financial statements and a history of what the fees typically are. Just like you would for the electric bill.

Josh explained it well for the few who didn't understand. But what we are forgetting is that credit card customers are also a big majority of your business. I don't think it's good business to surcharge your majority or not accept credit cards.

One last point...if businesses are just going to pass along the cost than they have no incentive to lower their processing fees with the card companies and the card companies will soon realize that if they haven't already. Then you might be paying 25% soon. That will keep people away for sure and how is that good business?

Scott Scott
Sep '23

"Whip...You don't have to be clairvoyant to know your processing fees."

You misread the post. I specifically stated the processing fee is the only thing you do know.

What you don't know is how many people will be using a credit card and what that percentage fee will be. Hence the clairvoyant statement.

There is also a cost to cash transactions. You have to maintain a cash register with cash for change. That’s money that’s not in the bank earning interest. You have take time to count out your tills every day and make a trip to the bank to make the deposit.
I don’t necessarily turn away from a business that charges me a fee for credit card usage, but it does make me question your business sense.

Gas stations have been doing it for years. I still use a cc for the convenience it’s a minimal amount.

GreatMeadows GreatMeadows
September 5th

I'm a local small business owner in business for 20 years. As I read all of these comments , I see two perspectives. That of the consumer and that of the business owner or at least a few who understand some of what small businesses go through in order to stay in business.

My business uses a credit card processing company that applies a 3.99% transaction fee. This fee goes directly to the processing company, not to us.
Prior to using this company, other companies that we had used charged us astronomical fees. The fees could range from 6% to as high as 10% plus the cost of the equipment, monthly surcharge fees, additional processing and equipment taxes etc. At the end of the day, the additional expense to us could range as high as 15-20%. A rewards card that a customer would use would be charged at a higher rate to us ( the merchant pays for those rewards).

The extended covid lockdowns in NJ put so many small business owners in catch up mode, paying back debt, trying to recover from being closed for as long as we were. So, coming back, we had to cut costs. This state already smashes us with insane taxes and insurance costs. That being said, the economy is in the toilet and has been for the past couple of years and only getting worse.

We accept checks, cash and credit/debit card. The checks and cash options give customers the cash discount which avoids the credit card processing company fee.
As a consumer, I do my best to support small businesses by paying cash to save them all of the insane fees.

Please keep some of these things in mind before you choose not to support a business that's just trying to survive. The best way to avoid the fees is simply to pay cash or check if they accept checks and everyone avoids unwanted fees.

+100 DaveF!!

JeffersonRepub JeffersonRepub
October 13th

Thanks JeffersonRepub!

It's complete BS. Isn't it bad enough we have to pay the server because the business, by law, they only have to pay them $3 an hour. That's right, they are paying your server $3 an hour because they can.They're already saving $11 an hour by making the customer pay their employees. If you can't afford to pay your employees a decent wage and the fees and surcharges, don't open a business. It's called overhead, which is the cost of doing of doing business, plain and simple. The cost isn't past on to the customer, it goes into the owner's pocket. It's bad business and they're teaching customers to be victimized and used by them. If you can't afford your overhead, shut down. Stop justifying making me pay your cost of doing business. I'm a small business owner, I wouldn't take a check, checks bounce and I get charged the same fee as if I bounced the check. I'd rather suck it up and pay the credit card fees, than the bounced check fee. It's simply the cost of doing business. Life has become digital, it's just a fact of life. If you don't want to pay the fees, be a cash only business. Also, if you can tip your server cash, personally, in hand. Some places "pool" their tips and your server doesn't get what expect or what or want them to. Servers are constantly being screwed. It's a crap job, unless the service is terrible be kind and understanding.

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