# Credit Cards and "consumer fraud" **URL:** \ **Category:** Factual Questions\ **Created:** [July 2, 2015, 5:17pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064 "2015-07-02T17:17:21Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [July 3, 2015, 4:44am UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/41 "2015-07-03T04:44:05Z")
> [@](#): > > Personally, I think that the amount that the merchant pays to accept the card should be charged visibly on the receipt and that people who don’t use a card should not be charged for it. So long as cash-users have to bear the costs of the armored car bills, the extra insurance for having wads of cash sitting around, the healthcare costs for cashiers shot during robberies, etc. > [@ethelbert](#): > > Imagine that sales tax was simply incorporated into the price of everything so that you never knew how much tax was being charged. I don’t think people would stand for it. Taxes being rolled into advertised prices is actually the norm worldwide. People stand for it without complaint in pretty much every country except the US and Canada. You also stand for it every time you buy, say, gasoline. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 3, 2015, 5:07am UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/42 "2015-07-03T05:07:54Z")
> [@Lord\_Feldon](#): > > Taxes being rolled into advertised prices is actually the norm worldwide. People stand for it without complaint in pretty much every country except the US and Canada. > > You also stand for it every time you buy, say, gasoline. Yes, the initial plan for Canada’s GST (VAT at the Federal level) was that it would be rolled in, but then the socialist party of our nation complained loudly the government was trying to hide the tax from the people, so it was made explicitly extra. I like the concept in Europe or ANZ that the tax is wrapped into the price, which conveniently ends in round numbers, not “.99”; a VAT also works best when it’s applied to pretty much everything. When you start exempting books, children’s clothes, health supplies, etc. - every exemption pushes the load onto someone else. Many credit card agreements, IIRC, have escalating penalties if you have too many disputed charges or reversed charges. The USA, unlike the civilized world, is still not on chip-and-pin (pretty soon!). The agreement typically says if card is present and signature matches, the merchant will not lose; however, “signature matches” is a judgement call, so is noticing fake cards and that sort of problem. In businesses where they are prone to fraud, they probably learn to limit their risk by rejecting some cards or demanding better ID - but how do you prove ID was good when the reversal comes through 3 weeks later? Chip cards, the cardholder agreement says - if the card is used (chip is pretty much impossible to fake) and the PIN is used, then the cost is the full responsibility of the cardholder. ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [July 3, 2015, 5:14am UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/43 "2015-07-03T05:14:37Z")
> [@md2000](#): > > The USA, unlike the civilized world, is still not on chip-and-pin (pretty soon!). We won’t be soon either. We’ll be on chip and _signature_, although I think the infrastructure for PINs will be there if they’re ever implemented. > [@md2000](#): > > In businesses where they are prone to fraud, they probably learn to limit their risk by rejecting some cards or demanding better ID - but how do you prove ID was good when the reversal comes through 3 weeks later? Merchant agreements in the US generally prohibit retailers from demanding ID anyways. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 3, 2015, 6:16am UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/44 "2015-07-03T06:16:43Z")
> [@Lord\_Feldon](#): > > We won’t be soon either. We’ll be on chip and _signature_, although I think the infrastructure for PINs will be there if they’re ever implemented. > … Really? What good is that? All it does is get rid of fake cards, but not any other fraud. I actually got to use Chip and Pin at some store in the USA a few weeks ago. ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [July 3, 2015, 6:24am UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/45 "2015-07-03T06:24:26Z")
> [@md2000](#): > > Really? What good is that? All it does is get rid of fake cards, but not any other fraud. Well, that’s 37% of fraud according to [this](http://www.statisticbrain.com/credit-card-fraud-statistics/), so that’s still a lot of good. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 3, 2015, 2:30pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/46 "2015-07-03T14:30:47Z")
> [@Ruken](#): > > Neither. He posted something incorrect. Outdated. And acknowledged. ---
**Author:** ![jacobsta811](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jacobsta811/32/2893_2.png) [@jacobsta811](https://boards.straightdope.com/u/jacobsta811)\ **Post date:** [July 3, 2015, 3:54pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/47 "2015-07-03T15:54:56Z")
> [@Emtar\_KronJonDerSohn](#): > > … > They do (did?) that because the cards they issue are Discover. Costco only accepts (accepted?) American Express for the same reason… Sam’s Club now takes Mastercard only, same deal though, specific deal with Mastercard & whatever bank they issue the sams club mastercard with. Costco only takes Amex until early 2016, when their deal expires and they switch to a deal with Citibank, which will leave them only taking Visa instead and issuing the Costco Credit card as a citibank Visa. ---
**Author:** ![Catamount](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/catamount/32/2840_2.png) [@Catamount](https://boards.straightdope.com/u/Catamount)\ **Post date:** [July 3, 2015, 4:11pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/48 "2015-07-03T16:11:19Z")
> [@DrCube](#): > > 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. They still don’t. Cash or debit card only. On the plus side, that means you never get stuck behind the little old lady who wants to take sixty years to write a check. ---
**Author:** ![Hershele\_Ostropoler](https://avatars.discourse-cdn.com/v4/letter/h/e47c2d/32.png) [@Hershele\_Ostropoler](https://boards.straightdope.com/u/Hershele_Ostropoler)\ **Post date:** [July 3, 2015, 4:24pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/49 "2015-07-03T16:24:58Z")
I assume at least part of the reason sales tax isn’t rolled into prices in the U.S. is that it isn’t uniform nationwide. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 3, 2015, 4:34pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/50 "2015-07-03T16:34:26Z")
> [@Hershele\_Ostropoler](#): > > I assume at least part of the reason sales tax isn’t rolled into prices in the U.S. is that it isn’t uniform nationwide. Only a partial reason, if you think about it. Every cash register with a plug these days has tax tables built in and can accommodate two or three options if necessary. A stronger reason is to make the tax invisible to the consumer. Very few people add on or think about the tax whey they’re judging a purchase. It’s pushed back into a vague “Yeah, I know” pigeonhole, even for major purchases like cars, and showing up as a line item at the very, very end is rarely a deal breaker. ---
**Author:** ![Hershele\_Ostropoler](https://avatars.discourse-cdn.com/v4/letter/h/e47c2d/32.png) [@Hershele\_Ostropoler](https://boards.straightdope.com/u/Hershele_Ostropoler)\ **Post date:** [July 3, 2015, 9:00pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/51 "2015-07-03T21:00:10Z")
Well, like, you can run an ad saying “$4.99+tax” everywhere, but if the tax were included you’d either have to run different ads or charge different base amounts in different markets. Every pizzeria I’ve been in has had the sales tax included in the price, but only pizzerias for some reason. And obviously they don’t have to worry about advertising in a variety of markets. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 3, 2015, 9:15pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/52 "2015-07-03T21:15:56Z")
> [@Hershele\_Ostropoler](#): > > Well, like, you can run an ad saying “$4.99+tax” everywhere, but if the tax were included you’d either have to run different ads or charge different base amounts in different markets. Even national ads are so regionalized these days it would be easy to trivial to adjust pricing by market. It’s not unusual, for example, for a nominally national ad in the first break of _CSI: Topeka Animal Control_ to be filled by five or six regional variants, all simultaneous in each time zone. Breaking it down by broadcaster and cable head-end is already done as well, but not as often. Many ad campaigns are too tightly targeted these days to run one generic one across the land. Sometimes it’s just a matter of using a model or actor who is more appealing to the region. Actually, with local or realtime ad composition, a different price could be laid into the appropriate slot of a nationwide commercial by the head-end. That’s often used (or was) when there were different 800 numbers in different states - “Call the number on your screen!” etc. Media advertising is well into the “third phase” of manufacturing. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 3, 2015, 9:22pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/53 "2015-07-03T21:22:01Z")
Missed it by that much… Sales tax also doesn’t change the price much on inexpensive things like burgers and pizzas. The whole country could price it at one level, and each retailer would have a slightly different actual retail price and profit that could be adjusted chain-wide through sharing, which franchise operations already do for things like media participation and special promotions. ---
**Author:** ![Pinmin](https://avatars.discourse-cdn.com/v4/letter/p/4af34b/32.png) [@Pinmin](https://boards.straightdope.com/u/Pinmin)\ **Post date:** [July 3, 2015, 10:28pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/54 "2015-07-03T22:28:37Z")
> [@Amateur\_Barbarian](#): > > Even national ads are so regionalized these days it would be easy to trivial to adjust pricing by market. It’s not unusual, for example, for a nominally national ad in the first break of _CSI: Topeka Animal Control_ to be filled by five or six regional variants, all simultaneous in each time zone. Breaking it down by broadcaster and cable head-end is already done as well, but not as often. Many ad campaigns are too tightly targeted these days to run one generic one across the land. Sometimes it’s just a matter of using a model or actor who is more appealing to the region. > > Actually, with local or realtime ad composition, a different price could be laid into the appropriate slot of a nationwide commercial by the head-end. That’s often used (or was) when there were different 800 numbers in different states - “Call the number on your screen!” etc. Media advertising is well into the “third phase” of manufacturing. You realize that sales tax can be state, county, and city based, right? The same item can potentially be about 6-8 different prices with tax in a 15-20 mile radius from me. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 3, 2015, 10:43pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/55 "2015-07-03T22:43:45Z")
> [@Pinmin](#): > > You realize that sales tax can be state, county, and city based, right? The same item can potentially be about 6-8 different prices with tax in a 15-20 mile radius from me. Yes, which is why I threw in the latter observation, that a chain could charge one flat price and ‘bury’ the sales tax differences. City and town tax additions tend to be pretty small, often a fraction of a cent. It’s pretty standard practice to throw some fine print on specific pricing. You could advertise to California assuming the 7.25% base tax and fine-print the city and local charges. (Is it still 7.25? Haven’t looked since we left.) ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [July 3, 2015, 11:21pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/56 "2015-07-03T23:21:35Z")
> [@Amateur\_Barbarian](#): > > Yes, which is why I threw in the latter observation, that a chain could charge one flat price and ‘bury’ the sales tax differences. > > City and town tax additions tend to be pretty small, often a fraction of a cent. It’s pretty standard practice to throw some fine print on specific pricing. You could advertise to California assuming the 7.25% base tax and fine-print the city and local charges. > > (Is it still 7.25? Haven’t looked since we left.) There’s also the issue of which items are taxable, which can make the difference much larger. For example, there is no NY state sales tax on individual clothing items under $110. There is no NYC tax on those items either. However, in Westchester and Nassau and Suffolk counties, those items are subject to the county sales tax which is around 3.5-4.5%, not a fraction of a percent. (Other counties have higher county tax rates, but I don’t know if they exempt clothing). If a chain set its prices to cover the tax , more localized chains or individual stores may have a lower price for the same item. For example, lets take a pair of boots that a small chain with 5 NYC locations sells for $100. NYC, no sales tax, so the price to the customer is $100. Now take another small chain - same boots, same 5 locations- but some locations are in Nassau and some are in Queens. Same TV and radio stations and newspapers for the most part. How much are the boots going to cost there once the Nassau sales tax is folded into the advertised price? More than the $100 the other chain is selling them for. Maybe not much more, maybe not enough to matter on a single item- but maybe enough to make someone in Queens do all the back to school wardrobe shopping at the chain with only NYC locations. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 4, 2015, 12:46pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/57 "2015-07-04T12:46:33Z")
> [@Amateur\_Barbarian](#): > > Yes, which is why I threw in the latter observation, that a chain could charge one flat price and ‘bury’ the sales tax differences. > > City and town tax additions tend to be pretty small, often a fraction of a cent. It’s pretty standard practice to throw some fine print on specific pricing. You could advertise to California assuming the 7.25% base tax and fine-print the city and local charges. > > (Is it still 7.25? Haven’t looked since we left.) I’ve always wondered - are states, provinces, or counties, or whatever not allowed to charge sales taxes in Europe or Australia? It seems the VAT is national and consistent across each of those countries. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 4, 2015, 1:33pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/58 "2015-07-04T13:33:43Z")
> [@md2000](#): > > I’ve always wondered - are states, provinces, or counties, or whatever not allowed to charge sales taxes in Europe or Australia? It seems the VAT is national and consistent across each of those countries. VAT typically replaces sales tax. I am very slightly in favor of a US VAT replacing most consumer taxes, but it’s nothing I’m prepared to argue with any strength. My biggest reason would be what the latter posts in this thread clearly reveal, that the “small taxes” in the US are a bewildering mess that we’ve chosen to make invisible, and I suspect a lot of inequity and special-pleading is buried in the endless rates, surcharges, loopholes, special conditions, exemptions, and reporting systems. IOW, if there’s one place we need something a lot like a “flat tax,” it’s on consumer and business transactions. ---
**Author:** ![Melbourne](https://avatars.discourse-cdn.com/v4/letter/m/b5e925/32.png) [@Melbourne](https://boards.straightdope.com/u/Melbourne)\ **Post date:** [July 4, 2015, 1:50pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/59 "2015-07-04T13:50:31Z")
> [@Dewey\_Finn](#): > > That benefit is for the consumer, not the merchant. So it doesn’t explain the reason given by the amusement park. > [@Amateur\_Barbarian](#): > > 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. As I understand it, when the customer has 0% liability, the Bank doesn’t wear it: the transaction is reversed. The amusment part takes the whole loss. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 4, 2015, 2:01pm UTC](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064/60 "2015-07-04T14:01:38Z")
> [@Melbourne](#): > > As I understand it, when the customer has 0% liability, the Bank doesn’t wear it: the transaction is reversed. The amusment part takes the whole loss. It depends. In the basic system, the merchant is responsible for some degree of identifying the customer using the card. Old-school, it was check the signature on the slip against the one on the card, and ask for ID as well. Now, Card+PIN plus card-number verification is usually considered enough, if it’s a terminal transaction. Card plus security number plus address validated through AVS is considered enough for online transactions. IF the merchant follows all the rules and can prove it, they don’t take a fraud chargeback, or at least can contest it. If they get sloppy and can’t prove the user presented as valid, it’s on them. But that’s true in pretty much all cases; what’s called “fraud protection” is entirely about cardholder liability, which could be 100% if the card had not been reported stolen or the issuer otherwise decided it was their fault. (The new laws limit fraud liability but even $50 or $100 is a nasty bite just because some skimmer or scammer got your card info… which is why the lower limits or zero liability is so attractive to consumers who know what it means.) [Previous page](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064.md?page=2) [Next page](https://boards.straightdope.com/t/credit-cards-and-consumer-fraud/724064.md?page=4)