The other night my hubby made a stop at the local convenience store to get me some much coveted chocolate ice cream. (He's sweet that way!)
When he came home, he was grumbling. The clerk told him that they were now implementing a 75 cent surcharge if you use a debit or credit card. If you don't want to pay the fee, you have to pay in cash.
Now, this wasn't a huge surprise... over the last few months, the clerks at this store have actually gotten annoyed when my husband has used his debit card for small purchases. Apparently, merchants, particularly gas stations, are getting hit hard by the fees that credit cards charge them for processing the cards.
But this is the closest convenience store to us... so it's not like we have a lot of options. In fact, the next nearest option is nearly 13 miles away.
What really amazed us was the excessiveness of the charge. I understand wanting to recoup your fees, but to make a profit, too? My husband said he won't be inclined to shop there anymore because of it.
Neither my husband or I carry much cash with us. We use our rewards credit card for all gas purchases and pay the bill in full each month. We use our debit card for everything else. We've found that when we live only on cash, we tend to fritter away more money. When we have to write down every debit and keep track of the credit card, we're MUCH more careful with our spending. Plus we like the security that comes with both of our cards.
So this new surcharge has us a little perplexed. On one hand, it could be a good thing if it encourages people who are already in debt to use cash instead of credit. On the other hand, I pay my bills every month. Shouldn't I have the option of paying in a manner that is most important to me without paying a penalty? Isn't the customer always right?
Have any of you had this happen in your neighborhood? Has it changed your spending habits? Please share your thoughts.
Friday, June 20, 2008
Penalty for Using Debit/Credit Card?
8 comments:
It's actually quite possible that they're not making a profit from that charge. I know from working at a Big Box store (not Walmart) that even they were paying $1.50 per transaction to Visa and Mastercard.
Oh man. Just another way to nickel and dime us. I hope that trend doesn't make its way to my area or I will have to completely revamp my money scheme. I presently put all of my purchases on my credit card and pay in full every month. I have a $600 reward for 3.5 years of purchases coming my way soon, but if there are fees everytime I use my card, that likely won't cover the difference anymore. Bummer, but thanks for the heads up!
I'm not an expert on this, but I've seen discussions on this, and apparently it violates the merchant's terms of agreement with Mastercard and Visa, i.e. Visa and Mastercard do not allow a merchant to charge more for using a credit card, nor for having a minimum amount in order to use the credit card. I believe there's a number you can call to report violations if you wish.
I understand that it's hard for the little guy. Does that station still take checks? I know a woman who owns a small gas station/convenience/grocery store and she said she'd much rather pay the credit card fees than to deal with bounced checks.
Surcharges and minimum purchase requirements are generally not allowed in the merchant's contract with Visa/Mastercard and other major credit card companies. You should call 1-800-mastercard and report them.
As far as I understand, merchants are hit with a 3 percent (or so) transaction fee from credit card companies.
A .75 cent surcharge is the equivalent of 3% of $25.
I think this surcharge, though annoying, is actually a good thing.
The stores can either raise all of their prices by a few percentage points, or they can just charge the people who use plastic.
Besides, if you have a credit card rewards program that earns you 3 percent back, but you're paying 3 percent more than you would otherwise, it seems to cancel out.
Lots of interesting points. I'm not sure if my husband will call the credit card companies or not... it's a risk when you live in such a small community. I personally, would probably just use cash or not go there.
@Kacie: Good point... I think I heard once that most credit card reward programs are really a wash because the credit cards get more from the merchants per transaction... so essentially you're paying for your own "rewards." Interesting. Something for me to think about.
This is ridiculous. There is a gas station near me that charges $0.10 extra per gallon if you use debit/credit. I find that a bit excessive. I understand the extra fee, but $0.10 per gallon.
I am a business owner that accepts credit and debit cards. You would not believe the fees we pay each time one is used. Do a small business a favor - use cash when making a purchase. Just because a person owns a business does not mean it is highly profitable or profitable. Small businesses keep this nation running.
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