It seems that everytime I use my debit card to purchase something the clerk always asks if I want cash back. I am even asked by young clerks early in the morning when I can still smell the Lucky Lager on their breath from the night before. This made me think that they are being more than just nice, but there is some financial benefit for giving me some of my money. I never see a charge on my bank statement, like when I pull money from a third party ATM. So what gives?
It’s just a courtesy. Vendors get charged a percentage when accepting a credit card, but usually pay a flat fee for debit cards. No loss on their part if you get cash or not. It’s actually quite handy.
It may be handy, but you pay a fee if you do get cash back.
Well, at the grocery store near me, they always ask, and i imagine it’s out of courtesy, because the little swipey machine I use doesn’t prompt me if I want cashback. The onr al my local Wal-Mart, however, does prompt, and I notice they never ask, cause then it’s being repetitive to the customer.
And I have seen charges on cashback. But it usually doesn’t go to the store, but to the operator’s of the card reader machine, and usually only on purchases below a certain amount (at my local Price Chopper it’s a $0.50 fee for cashback on a purchase below $20, and the notice says it all goes to the company that operates the swiping machine.)
Not in my (extensive) experience, Shawa. I don’t use credit cards- I’ve only got a debit card- and I’ve never had to pay a fee if I get cash back on a purchase. Heck, quite often I’ll buy something in the store just to get cash back without having to pay the $2.50 or so the ATM wants to charge me.
I’ve used this option for quite some time and have never been charged a fee.
I, too, have never paid a fee for getting cash back.
Well, I stand corrected, Lightnin’, I have never exercised the cash back option because someone told me there’s a fee involved.
There’s definitely one if you use an ATM that doesn’t belong to your bank. In fact, you get a double charge. One from your bank and one from the ATM’s bank.
The retailer does get something out of cash back - they remove cash from their tills. Retailers have to pay to handle cash, for example, to pay the security company to take it to the bank. Plus, the more cash there is in the till, the more likely the cashier is to find a creative way to steal it (retailers lose more from their own employees than from shoplifting). So a retailer is very happy to be able to convert inconvenient cash to electronic payment, at no cost to themselves.
True, except that the discussion is not regarding ATMs but POS* readers at a retail checkout.
Whatever fee is charged by one’s bank for using an ATM will generally be charged for a POS purchase. Getting cash back increases the amount of the sale/withdrawal, but does not affect the fee. Regardless of the bank with which one does business vs the bank with which the merchant does business, there is not (in my experience in NE Ohio) any additional fee for a POS cash back.
In fact, I have seen suggestions that if one needs to make a purchase using a debit card, it is always a good idea to withdraw some cash along with it to reduce the number of (fee bearing) transactions that one will normally make at an ATM. (I do not specifically recommend that practice, but I note that the suggestion has been made.)
- POS = Point of Sale, not (in this instance) Piece of Shit.
Well, I’ve used two banks now (Wells Fargo and a rather limited credit union, which shouldn’t be included in this discussion) and I don’t remember ever getting a fee on a POS purchase. The retailer pays a fee, sure, but I don’t believe I was ever charged an extra fee on the use of my debit card.
FYI, we don’t get charged for using cashback in this country (UK) either, also we don’t get charged for using other bank’s cashpoints (ATMs).
I’ve been using a debit card for over 10 years now, in 2 states and at 3 different banks. Never, ever charged for a point-of-sale transaction, and never, ever charged for cashback in such circumstances, either.
If your bank is doing this - close your account and take your business elsewhere.
amarone has it.
Handling cash costs the retailer. If they can give it to you in return for an electronic debit instead it works out a cheaper for them. They certainly aren’t going to charge you for the service.
Consequently staff are trained to ask if you wish cash back.
It will be interesting to see what happens, however, if and when debit card purchases start to surpass cash purchases and there isn’t much in the way of cash in the till.
God bless you, amarone. Sometimes I get to feeling all down on the SDMB, and then someone comes through with a brilliant piece of analysis like yours that no one else came up with. Good work.
I don’t know how on point this is but I have a Paypal debit card and if you have them ring it up as a credit you get a small % back from Paypal but if it’s rang up as a debit you don’t.
I don’t know why it matters to Paypal but I’ll take whatever I can get back and be happy to get it.
As far as the OP’s question, the reason the clerk asks if you want cash back is because her computer screen is prompting her to either put in a number or hit the enter key. Merchant POS machines are set up to allow cash back with debit purchases because it’s just like writing a check. In most stores you can write a check for a few $$ over the purchase price and they will give you change.
Not so with a credit card. Most credit cards have different interest rates for purchases and cash advances, so you can’t mix the two on the same transaction.
Well, just four weeks ago Mastercard and Visa agreed to lower their fees to merchants for the use of certain debit cards.
Perhaps by making the transaction cash-back, it gets recorded as a cash withdrawal on the part of the customer. Perhaps the friendly cashier is courteously passing the debit charges to you, and evading the debit card fee for the store.
Not always true, I think - I’m pretty sure that some banks chanrge you if you use some machines that aren’t theirs. I don’t think the bank that owns the machine can charge you (they can harge your bank, whic would be why your bank charges you).
My last statement had a fee for non-Barclays ATM use.