It doesn’t seem like much of a difference. In Florida you see these signs all of the time:
Apples, $1.00/pound
Includes Cash Discount
You are still in for a surprise when you use a credit/debit card. I’m with some of the others: this seems like a silly law where the state is injecting itself into a matter where it has no business, and it has no effect.
I expect, jtgain, that the state requires that the apples have a price shown for the full, non-discount price as well. Certainly, California law requires that. So it is not the same thing entirely at all.
Please also note that the fact you see signs like that doesn’t mean that the signs aren’t violating some law, or some portion of the contract between the merchant and VISA/Amex/MasterCard. I see minimum cash purchase requirement signs all the time, and not always at mom & pop places. The Barney’s convenience stores in the Toledo area were doing that last summer; these are connected to the local BP/Mobil gas stations, so not some small operation.
Here is one more statute that adds to the complexity of the cash discount/credit surcharge issue:
If I have a choice, I take checks. In my case (computer shop) CC charges are often pretty hefty. Sell a computer and $15-20 a whack is not uncommon. Do that a dozen times a month and it adds up in a hurry. My average ticket is about $150 or about $3-4 per transaction. I know amex is at a higher rate but I have not nitpicked it because only a handful of customers seem to use it.
You don’t see VISA/MC/etc doing much about the minimum purchases and such because they still get the money, and it is effectively biting the hand that feeds them.
I understand that, but the old way of selling items on credit left businesses with bad debt, an expense that the credit card companies now bear. There is a cost of selling on credit, but most businesses do so because the profits outweigh the costs.
If the fees are so onerous, then why does your business accept credit/debit cards?
Is this a serious question? Do you really not know the answer?
He accepts credit cards because just about everyone in the known universe expects to be able to pay with credit cards. Accepting credit cards allows him to make sales that he would not be able to make if he didn’t accept them.
That doesn’t mean, however, that the fees associated with taking them don’t cut into his margins, sometimes substantially. And even though he takes credit card, there’s nothing surprising about the fact that, all other things being equal, he would prefer everyone to pay by cash or check.
Correct, especially in a world where a significant percentage of my potential customer base can easily find stuff and order it from tiger or newegg not realizing their whole business model is razor thin margins and charging massive shipping fees. Computers tend to be low margin sales, losing another 2-3% can often be losing 1/3 of what you make on the hardware sale.
I wonder which model is screwed up. Tiger and Newegg both have exceptionally good shipping fees, and don’t make an ugly face when I whip out my Mastercard. I think everyone knows that you should order from Tiger Direct or Newegg, unless you need it now. And you know what? When I need a computer part now, I’m glad to pay 50% more than the online price just to be able to get it now. I’m not trying to be insulting; on the contrary, I have no idea how in the world you think you can compete with those types of prices, even factoring in the shipping!