The local radio plays ads about this saying it is a bad thing. No surprise, the ads are paid for by a banker group I believe.
Related, I think Clark mentioned that vendors may tack on a credit card service fee in the future. This would help the little guys make some better margin. I don’t see Walmart, etc. doing that necessarily but if they think they can still pull in their revenue w/o a hiccup, they would probably go along.
For me as a shopper, I’d probably just use more cash if rewards were eliminated. Maybe credit card companies would create some other means to entice using a credit card. I am OK with having a grace period as a sole feature, but I definitely would use cash more if I could not get any points when buying stuff.
This happened to us twice last week – once at a restaurant where they posted notices for all to see and we paid cash, and once at a car dealer where we were getting our car serviced they told us when we were paying, and we were stuck paying the $11 extra (no ATM within walking distance).
Yeah, so much for CC rewards. We won’t be getting as much, that’s for sure.
Better margin? Don’t you think the vendors have already raised their prices to absorb the CC fees they pay? Once merchants start charging customers the CC fee, do you think more people will use cash? And when that happens, will vendors lower their prices?
Maybe people will use cash more and vendors will be reminded of why it was a good idea in the first place – no money lost to giving out wrong change or employee theft, extra security having more cash in the store, and people encouraged by convenience to buy more.
Notwithstanding a cc fee, why would you prefer a cash purchase to a no-points and no-record cash purchase? I think there is value in using a cc, even without cashback,points or mileage benefits.
Unless you take it to court, you cannot appeal to a third party when you pay cash. You have to deal with the entity that sold you the item. And you have to keep and produce the paper receipt to prove you bought the item.
If you mean we all pay in the end with higher prices, this may be true. But for an individual transaction where the merchant does not give a discount for cash, then the CC payer gets the discount in the form of the cash back reward - as long as you pay off your balance every month. The ones who carry a balance on their CC are the ones who REALLY pay.
In NY we are already seeing 3-4% being added to the cost of CC purchases. That offsets any reward (of 2-3%), but how many consumers will go back to carrying wads of cash again? Using a CC still gives extended protection on warranties, better prices on vacation travel, access to concierge, etc. An option to close a CC that does that is you might see your credit score go down since your total authorized chargeable amount is lower.
From a merchant prospective the end user will always pay as the end user, i.e. his customer is where the profit center will be derived from.
The merchant will not differentiate between cash and CC buyers when they apply a markup to their COG on a widget or service. A total COG is applied which includes all expenses for bringing all their products or services to market.
You’re looking at it from an individual transaction consumer’s prospective, I’m looking at it from a merchant prospective who takes into account all his business expenses and applies them to his entire customer base as an average.
This is my point. So if you pay with a CC, you get that markup back. But if you pay with cash you don’t. I don’t make the rules. But if I have to play by their rules, I try to use them to my benefit when I purchase goods and services.
And if the vendor now charges you 3% in addition to having raised their prices a long time ago to cover the CC fees, and you only get 2% cash back, then it’s a no brainer. Gotta go back to carrying wads of cash, or find a rewards card that pays more.
In case you haven’t noticed, we’ve gotten hooked on using credit cards for everything. So now that this is how everyone (customers, businesses, banks) operates, those with the money & power (hint: not the customers) are starting to charge us the CC fees in addition to the already higher prices. I’d love to revolt by using cash for (almost) everything to piss off the merchants and CC companies, but it would take millions of others doing the same thing, or congressional intervention, to have any effect.
The merchants have the power to do this. When I buy a case of wine at my local store, they give a 7% discount if you pay by CC or 10% for cash. So I pay cash. All the vendors at my local farmers market charge a 3% markup for CC purchases, so I pay with cash. The merchants can create the incentive to pay with cash.
Some merchants, although to be honest, I rarely see cash discounts (gas stations). What about paying for airline tickets, rental cars, and Amazon orders where payment with CC is expected, and when you take your car in for service like we did and are stuck paying the additional 3% because you didn’t know to bring wads of cash, don’t have a debit card, and no ATM within walking distance?
Will our experience last week when we encountered 2 merchants who wanted to add 3% to our bill become the norm?
I work in a grocery store. CC’s with rewards charge the store a higher percentage than cards without. So, guess who is paying for “your” rewards, the merchant. You don’t think the CC issuers are paying for the rewards. That is why they/we are starting to charge fees for CC’s.
I grew up forever seeing at the gas pump pricing that gave a cash price and a credit card price. Now the big gas companies push their credit card where you get a discount vs. using a competitor’s credit card. Absolutely never see a discount for cash payment. I’d pay cash easily if they gave a discount, but they don’t, so I use a card.
Isn’t this also the case with coupons and BOGOs and any discount? Stores and manufacturers have to mark up the products to cover these discounts just like they have to mark up for CC fees/rewards. Is the solution to eliminate CCs and coupons and all discounts? Or do you become a good “Clark” consumer and take advantage of all the discounts/rewards that are available to you?