So, a friend took her kids to an amusement park, and wound up having to turn around and go home due to the fact they only accept Discover Card and Cash, and the ATM was broken. I checked their website and found the following:
My question is, what consumer fraud are they talking about that V, MC and AMEX treat differently than Discover?
I don’t have an answer, but I’m curious; what is the name of the amusement park? Not accepting Visa and Mastercard is unusual (although I’ve seen some places that don’t take Amex).
I don’t know if it is still valid but this cite from 2013 says that Discover is the only one to have a $0 liability on PIN based debit transactions and fraudulent ATM transactions.
I don’t know about your country but any amusement park over here would rapidly go out of business with a policy like that.
:dubious:
There was only 1 ATM in the entire amusement park?
If you don’t have the money to pay the admission fee, you can’t access the ATMs in the park. You need to access an ATM outside the entrance. Of course, that doesn’t explain why the friend couldn’t have driven to a gas station, bank, hotel, shopping area, etc near the park to get to an ATM. Well, unless the park was hundreds of miles from any other businesses.
I’m curious what park this is to research it more myself. All I can imagine is that discover has some kind of protection merchant side that the others do not. High volume stuff like major theme park admissions can get ugly in a hurry in todays credit card piracy environment.
Yeah, it’s in the middle of the desert hundreds and hundreds of miles away from the nearest business. 
I think the OP needs to ask their friend some clarifying questions. Seems like there is a piece or two of the puzzle missing here.
Though I do remember when Sams Club would only accept Discover. Don’t know if that’s still the case. I can’t see how an amusement park could survive doing it.
My thought is (based on her FB posts) that my friend is a bit short on cash, and wanted to pay for the trip through their credit card. By the time she figured she could swing it on a cash basis, with the broken ATM, they called it a day. Believe me, the last thing she wanted to do was drive 45 minutes, have her kid in tears, and drive back home because she couldn’t be bothered to go to a gas station ATM. I won’t be embarassing her by asking any more details.
Anyway, the place is the Land of Make Believe in Hope, NJ. Small, family owned park, I think. At least it’s not part of any established big name theme park, far as I can tell.
That statement could very well be like the statement that many businesses make that a screwy internal policy is “due to government regulations” that nobody can cite. It doesn’t have to be true.
“Consumer fraud” can mean “fraud committed by consumers” or “fraud committed against consumers.” So even if the sign is truthful, you can’t really tell what it means.
It could mean that the park has experienced such a high level of credit card fraud that no processor wants to give them a merchant account or any processor willing to deal with them has imposed onerous fees and terms, but they somehow have gotten a Discover account on terms that they can live with.
Or it could just mean that they have negotiated a special deal with Discover like Costco did with American Express.
The only other possibility that I can think of is the Great October 1, 2015 liability shift. Maybe they don’t want to get all new payment terminals to support EMV cards. Mastercard and Visa will implement rather stringent rules about merchant liability if they don’t start using EMV terminals by that date. Discover’s policy is a little more wishy-washy: “Fraud Liability Shift policy will be a risk-based payments hierarchy that benefits the entity that leverages the highest level of available payments security.”
Here is the website and the story checks out. Says just what you said. Strange. In this day and age I would think that would limit their business something fierce.
Looks like a neat place, though. 
For those who don’t know how it works, a business has to have a “merchant account” to be able to accept and process credit cards. (And debit cards, although in theory those can be handled separately.) There is nothing about having a business banking account that automatically allows the business to accept cards… they have to have a specific account with a provider of “merchant services,” as the service is called.
You can go through your commercial bank, and if you’re big enough, that can be a good option. Most merchants will go with providers that have lower rates and better terms for small or specialty merchants - the convenience store that does 5,000 $10 transactions and the jewelry store that does 50 $5,000 transactions in a month would probably not use the same provider.
The smaller the average transaction, the higher the volume, and the higher the rate of fraud and misuse, the higher the merchant charges go. Target might pay 5 cents a transaction and 1 percent as its service fee; a convenience store might pay 35 cents and 2.5 percent, or more.
In general, when you find a business that won’t take credit or is oddly selective about it, it’s because they don’t want to pay the service rates for their category or operation. Sometimes it’s because they’re cheap bastards and would rather inconvenience some large part of their market rather than take the tiny hit on credit purchases. Often, though, their service rates are high enough that it’s a significant factor for hundreds or thousands of low-dollar transactions, and they just can’t afford to take the discount.
I’d bet the amusement part has had its share of fraud issues, possibly not all on the customer side, and can’t get general credit card services except at proportional rates - $1 and 5%, or worse.
Also, most merchant services accept all cards, or most of them. When a merchant only accepts one card, like Discover, it means they went right to that card’s sales division and worked out a deal, rather than going through the more common combined ‘brokers.’
Also also, it is illegal in most places for stores to either charge a surcharge on credit purchases, or a “cash discount.” Consumer protection laws, for good or bad, require sellers to treat all forms of payment as equal. So the cost of the credit transaction has to be factored into the price, and if it’s high, that screws and discourages cash customers.
My brother and I ran a business out of our parents home for 30 years. Setting up an account to accept credit cards wasn’t that big of deal. We did have to pay a 2.8% fee on sales via CC.
Is that state or federal? I don’t remember ever being told this. Paul and I routinely tacked on 3% for credit card sales as do a lot of merchants, especially online. Plus I see a lot of gas stations where the posted price is a cash price, credit is more.
That benefit is for the consumer, not the merchant. So it doesn’t explain the reason given by the amusement park.
No, it’s not hard at all, as long as you’re willing to accept the rates you can get. There are a lot of small businesses run by anti-tax, anti-bank, anti-every-cost-there-is types who will shoot themselves in the foot by saving that small cost and driving customers away with a cash-only policy.
It’s gotten much, much easier. I worked next to BofA’s merchant services when getting an account was on a par with getting listed on the big board; now absolutely anyone can take credit cards using PayPal and a few more specific competitors. And businesses can have merchant services in 24 hours, POS terminal and all.
It’s not federal. It may be state in some states. There are exceptions, typically for gas stations and similar retailers. And a lot of businesses do it not knowing it’s illegal - or, more often, against the terms of their merchant account. A lot a lot of businesses that don’t take cards quit because their provider found out they were doing this, or refusing to take credit purchases under a certain amount, or other practices forbidden by the service, and got pissed off. (There are usually other providers that will let merchants set sales rules… but not surprisingly, they tend to be more expensive or limited.)
Yes. Missed this. Fraud protection means the consumer doesn’t pay; I’d bet that the more generous the card or issuer’s fraud protection, the harder they go after merchants who take fraudulent charges. Fail to have crossed an i or dotted a t, and you eat the charge.
I’m not sure about the States but I know in Canada it was a clause written into the merchant contract rather than a law. At least it was 12 years ago when I worked for a credit card processing company.
I realize but it might be an ethical stance on the part of the owners. It was just an obvious difference that came up on a quick google.
What’s the ethical basis for not accepting credit cards?
(Actually, I can think of one, but it’s pretty tangential to this discussion.)
I think Aldi’s refuses to take credit cards (or did at one time) because they don’t want their largely poor clientele to go into debt for groceries.
The Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Act has prohibited credit card companies from enforcing any cash or debit card discount bans since July 21, 2011. And, before anyone mentions it, merchants are now allowed to set a minimum credit card purchase of $10 or less.
Any provisions in your merchant contract to the contrary are unenforceable.