# Costco's "our credit card only" policy. **URL:** \ **Category:** Factual Questions\ **Created:** [January 10, 2009, 7:41pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700 "2009-01-10T19:41:17Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![MikeS](https://avatars.discourse-cdn.com/v4/letter/m/919ad9/32.png) [@MikeS](https://boards.straightdope.com/u/MikeS)\ **Post date:** [January 10, 2009, 11:45pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/41 "2009-01-10T23:45:44Z")
> [@Alex\_Dubinsky](#): > > Fascinating. Do you have more information? [Here you go.](http://www.washingtonpost.com/wp-dyn/articles/A7038-2004Oct4.html) The Supreme Court case, decided in 2004, was brought by the Justice Dept. under anti-trust law. AmEx subsequently sued Visa & Mastercard for damages; the defendants settled independently, with Visa paying $2.1 billion (!) in late 2007 and Mastercard $1.8 billion in mid-2008. ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [January 10, 2009, 11:48pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/42 "2009-01-10T23:48:26Z")
> [@MikeS](#): > > [Here you go.](http://www.washingtonpost.com/wp-dyn/articles/A7038-2004Oct4.html) The Supreme Court case, decided in 2004, was brought by the Justice Dept. under anti-trust law. AmEx subsequently sued Visa & Mastercard for damages; the defendants settled independently, with Visa paying $2.1 billion (!) in late 2007 and Mastercard $1.8 billion in mid-2008. Interesting. I believe a similar thing has just happened in Canada, with banks now starting to issue both Visa and MasterCard. ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [January 11, 2009, 12:21am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/43 "2009-01-11T00:21:09Z")
> [@Alex\_Dubinsky](#): > > That’s crazy. That’s besides the fortune they make in interest payments. It’s armed robbery. The government _should_ do something about it, because the concept of making it free to consumers but then gouging the merchants distorts incentives. All you would need is a rule like, “CC charges must be paid on top advertised price,” and you’d see how quickly the fees would drop. Also, the current system fosters descriminatory pricing against smaller merchants, which downright hurts the economy. Almost all of this is completely wrong. It is kind of out of the scope of this thread, but if there is any interest whatsoever, we can hash out the basics of card economics elsewhere. ---
**Author:** ![Tim\_T-Bonham.net](https://avatars.discourse-cdn.com/v4/letter/t/46a35a/32.png) [@Tim\_T-Bonham.net](https://boards.straightdope.com/u/Tim_T-Bonham.net)\ **Post date:** [January 11, 2009, 1:15am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/44 "2009-01-11T01:15:23Z")
> [@Si\_Amigo](#): > > their quasi-Nazi like security procedure for letting you out of the business, reduced theft rates in exchange for a minor inconvenience to you the member. I don’t really see how that quasi-Nazi security actually reduces theft any. It’s usually a little old man (if he was a Nazi Stormtrooper, he’s been retired from der SS for quite a while now!) who checks the receipts at the door, and he spends about 5-10 seconds glancing at it, when the person has a whole cart full of items. I just don’t see how he would catch it if they had slipped something unpaid into that cart. And I’ve never seen it happen – never even seen anyone questioned about anything, or the cartons on top of the cart moved to look under them – nothing at all except “Thank You for shopping at CostCo; have a nice day”. Besides, wouldn’t this be caught at the cash register, before the person ever exits the store? If it has any effect at all, it must be a psychological deterrent one only. ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [January 11, 2009, 1:39am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/45 "2009-01-11T01:39:04Z")
> [@t-bonham@scc.net](#): > > If it has any effect at all, it must be a psychological deterrent one only. Oh, that’s undoubtedly what it is. It’s the same reason that Wal-Mart has greeters in the front of the store (who are actually there to keep an eye on people _leaving_, not arriving). it won’t stop a determined thief, but it may discourage the casual shoplifter. ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [January 11, 2009, 1:48am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/46 "2009-01-11T01:48:54Z")
I’m surprised businesses in the US don’t do what many of them (legally) do here: Charge an extra 2-3% of the sale if you pay by AmEx or Diner’s Club, to cover the higher fees those cards charge the merchants for the sale. “Big” Businesses usually just take the hit on the fees (because they can afford to), but a lot of smaller businesses (cafes, family-run stores, that sort of thing) often pass the charges on. ---
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [January 11, 2009, 2:16am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/47 "2009-01-11T02:16:28Z")
> [@Martini\_Enfield](#): > > I’m surprised businesses in the US don’t do what many of them (legally) do here: Charge an extra 2-3% of the sale if you pay by AmEx or Diner’s Club, to cover the higher fees those cards charge the merchants for the sale. > > “Big” Businesses usually just take the hit on the fees (because they can afford to), but a lot of smaller businesses (cafes, family-run stores, that sort of thing) often pass the charges on. Business figure in the cost of credit cards in their pricing schemes already. So if a merchant wants to make a five dollar profit, let’s say, they just add in the cost of all fees when determaining what to sell their widgets for. In the USA you can’t charge higher for credit cards than you can for cash. You can give a discount for cash, but not add extra for credit. Certain government organizations like the IRS are exempt from this and can add in a fee for using a credit card. So you can’t say I’ll charge $5.00 if you pay cash and $5.50 if you pay Amex, you CAN say I’ll charge $5.00 for everyone and only $4.50 if you pay cash. ---
**Author:** ![Rhubarb](https://avatars.discourse-cdn.com/v4/letter/r/59ef9b/32.png) [@Rhubarb](https://boards.straightdope.com/u/Rhubarb)\ **Post date:** [January 11, 2009, 2:30am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/48 "2009-01-11T02:30:05Z")
> [@t-bonham@scc.net](#): > > I don’t really see how that quasi-Nazi security actually reduces theft any. > > … > > Besides, wouldn’t this be caught at the cash register, before the person ever exits the store? > > If it has any effect at all, it must be a psychological deterrent one only. The receipt checker is there to ensure that you have a receipt and that it has a current time/date stamp. This prevents people from either just walking out without going to the register or buying a big-ticket item, like a bigscreen TV, on Tuesday and going in on Wednesday and picking up an identical item and showing their old receipt for it. If they actually took the time to do an item by item inventory of your cart, it would annoy the customers mightily. A quick scan to verify time/date and so forth, not so much. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [January 11, 2009, 2:38am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/49 "2009-01-11T02:38:23Z")
they also mark the receipt with what looks like a hilighter. The guy at Target once, when I had declined a bag, compared what I was carrying to my receipt. ---
**Author:** ![IAmNotSpartacus](https://avatars.discourse-cdn.com/v4/letter/i/cc9497/32.png) [@IAmNotSpartacus](https://boards.straightdope.com/u/IAmNotSpartacus)\ **Post date:** [January 11, 2009, 2:50am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/50 "2009-01-11T02:50:28Z")
> [@Maeglin](#): > > Indeed it is. All cards must be accepted, and the price to the merchant is the same for all products. Perhaps this is an Amex-only “feature,” but I certainly pay a premium discount rate for rewards cards and government purchasing cards. I cannot say for certain what the processing rate on a given Visa/Mastercard card is until I get my merchant statement at the end of the month. ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [January 11, 2009, 3:04am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/51 "2009-01-11T03:04:42Z")
> [@Martini\_Enfield](#): > > I’m surprised businesses in the US don’t do what many of them (legally) do here: Charge an extra 2-3% of the sale if you pay by AmEx or Diner’s Club, to cover the higher fees those cards charge the merchants for the sale. > > “Big” Businesses usually just take the hit on the fees (because they can afford to), but a lot of smaller businesses (cafes, family-run stores, that sort of thing) often pass the charges on. Legally (well contractually) we can’t. We are technically allowed to give a discount for using cash, but you are not allowed to implement a surcharge for using credit. Unfortunately, this means that that our markup is affected by it which in turn means that even if you pay with cash, you are still helping to cover the costs of the other customers using credit. Also, no matter how you look at it, in the end, one way or another, the customer covers the fees. No business is going to absorb that. ---
**Author:** ![IAmNotSpartacus](https://avatars.discourse-cdn.com/v4/letter/i/cc9497/32.png) [@IAmNotSpartacus](https://boards.straightdope.com/u/IAmNotSpartacus)\ **Post date:** [January 11, 2009, 3:06am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/52 "2009-01-11T03:06:38Z")
> [@Joey\_P](#): > > Legally (well contractually) In some states, it is illegal. California being one. ---
**Author:** ![Moirai](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Moirai](https://boards.straightdope.com/u/Moirai)\ **Post date:** [January 11, 2009, 3:12am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/53 "2009-01-11T03:12:26Z")
> [@Si\_Amigo](#): > > I like the fact that if you don’t do a certain amount of business with them over the year to justify a certain level of savings they will refund a portion of your membership fee. Last year I got $33 back on a $100 executive membership fee. 🆒 Actually, the Executive Membership has a “cash back” feature- I think it’s 2.5-5% of what you spend in a year. At least, that’s how my Executive Membership works. Never had a portion of a membership fee refunded, though. 😕 > [@](#): > > _I also like the free munchies they set up before and after lunch. Sometimes I just go there to chow and shop, probably made up the other $67 in my cost for membership right there alone_.😃 When hubby was in law school, he and his study partner would drive 20 miles to Costco, make 2 or 3 circuits of the demo’s and call it lunch! ---
**Author:** ![Rick](https://avatars.discourse-cdn.com/v4/letter/r/9f8e36/32.png) [@Rick](https://boards.straightdope.com/u/Rick)\ **Post date:** [January 11, 2009, 3:49am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/54 "2009-01-11T03:49:08Z")
> [@Gfactor](#): > > Sears used to only accept its own cards–Sears and Discover. [News Articles - FindArticles](http://findarticles.com/p/articles/mi_hb4298/is_199308/ai_n14947377) And J C Penny only took Penny’s own card, Montgomery Ward only took the Ward’s card, Chevron only took Chevron cards… ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [January 11, 2009, 4:02am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/55 "2009-01-11T04:02:07Z")
> [@Rick](#): > > And J C Penny only took Penny’s own card, Montgomery Ward only took the Ward’s card, Chevron only took Chevron cards… Right, but what’s different is that all those were proprietary cards. Costco’s (and others) are not. ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [January 11, 2009, 4:10am UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/56 "2009-01-11T04:10:18Z")
> [@Rick](#): > > And J C Penny only took Penny’s own card, Montgomery Ward only took the Ward’s card, Chevron only took Chevron cards… Well, up until the late 1950s / early 1960s, credit cards, as we know them today, really didn’t exist. Before then, you only had “charge cards”, on which you needed to pay the entire balance each month. Originally, charge cards were issued by individual merchants, and rarely were accepted by anyone other than the merchant who issued the card. Diners Club claims that it was the first “universal” charge card, when it was invented in 1950; the AmEx charge card followed a few years thereafter, when AmEx saw charge cards like Diners and Carte Blanche eating into their travelers cheque business. And, as many of those cards were traditionally “travel and entertainment cards”, they weren’t always taken by other sorts of merchants. What we now know as MasterCard and Visa came into being in the late 50s (BankAmericard, now called Visa) and mid 60s (Master Charge, now called MasterCard). ---
**Author:** ![DesertDog](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/desertdog/32/11503_2.png) [@DesertDog](https://boards.straightdope.com/u/DesertDog)\ **Post date:** [January 11, 2009, 5:21pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/57 "2009-01-11T17:21:21Z")
> [@t-bonham@scc.net](#): > > I don’t really see how that quasi-Nazi security actually reduces theft any. > > It’s usually a little old man (if he was a Nazi Stormtrooper, he’s been retired from der SS for quite a while now!) who checks the receipts at the door, and he spends about 5-10 seconds glancing at it, when the person has a whole cart full of items. I just don’t see how he would catch it if they had slipped something unpaid into that cart. And I’ve never seen it happen – never even seen anyone questioned about anything, or the cartons on top of the cart moved to look under them – nothing at all except “Thank You for shopping at CostCo; have a nice day”. > > Besides, wouldn’t this be caught at the cash register, before the person ever exits the store? > > If it has any effect at all, it must be a psychological deterrent one only. I got caught, once. I pushed the cart up to the door and handed the receipt off to the checker. He glanced at the dozen or so objects, then the receipt, did a double take and looked at the cart again. “How many DVDs did you buy?” he asked. When I answered two he said, “There’s only one here.” Somehow, one had gotten past the checker. I went with the other one to the customer service desk just a couple steps away, and paid for it there, and was on my way. From his reaction, it doesn’t happen very often and I didn’t have the cart chock-a-block with stuff ao counting what I had was not a big challenge, but it was enough that he did have to count them. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [January 11, 2009, 5:59pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/58 "2009-01-11T17:59:53Z")
> [@kenobi\_65](#): > > Well, up until the late 1950s / early 1960s, credit cards, as we know them today, really didn’t exist. Before then, you only had “charge cards”, on which you needed to pay the entire balance each month. > > Originally, charge cards were issued by individual merchants, and rarely were accepted by anyone other than the merchant who issued the card. Diners Club claims that it was the first “universal” charge card, when it was invented in 1950; the AmEx charge card followed a few years thereafter, when AmEx saw charge cards like Diners and Carte Blanche eating into their travelers cheque business. And, as many of those cards were traditionally “travel and entertainment cards”, they weren’t always taken by other sorts of merchants. > > What we now know as MasterCard and Visa came into being in the late 50s (BankAmericard, now called Visa) and mid 60s (Master Charge, now called MasterCard). That souncs about right. I came up during those years (b 1945) and remember that AmEx was thought of as a status symbol. Any credit card was, but they were the top as I recall. At one time you had to actually qualify to get a credit card. Imagine that! :eek: ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [January 11, 2009, 6:26pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/59 "2009-01-11T18:26:54Z")
> [@kenobi\_65](#): > > Well, up until the late 1950s / early 1960s, credit cards, as we know them today, really didn’t exist. Before then, you only had “charge cards”, on which you needed to pay the entire balance each month. > > Originally, charge cards were issued by individual merchants, and rarely were accepted by anyone other than the merchant who issued the card. Diners Club claims that it was the first “universal” charge card, when it was invented in 1950; the AmEx charge card followed a few years thereafter, when AmEx saw charge cards like Diners and Carte Blanche eating into their travelers cheque business. And, as many of those cards were traditionally “travel and entertainment cards”, they weren’t always taken by other sorts of merchants. > > What we now know as MasterCard and Visa came into being in the late 50s (BankAmericard, now called Visa) and mid 60s (Master Charge, now called MasterCard). More on this here: [Is it safer not to sign the back of your credit cards? - The Straight Dope](http://www.straightdope.com/columns/read/2819/is-it-safer-not-to-sign-the-back-of-your-credit-cards) ---
**Author:** ![SmackFu](https://avatars.discourse-cdn.com/v4/letter/s/53a042/32.png) [@SmackFu](https://boards.straightdope.com/u/SmackFu)\ **Post date:** [January 11, 2009, 8:29pm UTC](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700/60 "2009-01-11T20:29:19Z")
> [@Martini\_Enfield](#): > > I’m surprised businesses in the US don’t do what many of them (legally) do here: Charge an extra 2-3% of the sale if you pay by AmEx or Diner’s Club, to cover the higher fees those cards charge the merchants for the sale. This doesn’t happen because the standard contract between the card provider and the business states that they can’t charge a surcharge. The card providers don’t want any barriers to someone using their card. Some smaller businesses ignore this, figuring they’ll never get caught, so the providers often have ways for annoyed customers to rat them out. > [@Joey\_P](#): > > Also, no matter how you look at it, in the end, one way or another, the customer covers the fees. No business is going to absorb that. Well, the customer base as a whole will cover the fees. So the credit card users come out ahead, and the cash users subsidize them. So it does make a difference to the individual customer. [Previous page](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700.md?page=2) [Next page](https://boards.straightdope.com/t/costcos-our-credit-card-only-policy/480700.md?page=4)