Has anyone noticed an increase in the number of places offering a discount for cash payment? Around here, South Louisiana, it certainly seems to be spreading to more and more stores. Mostly restaurants, but not entirely. The large chains aren’t doing it, but lots of smaller stores are offering a lower price (the going rate seems to be around 3%) for cash. As the CC bills keep getting higher, the cash discount becomes more and more significant.
Just curious, has anyone seen a trend in your area of the last year or two?
I’ve seen a big recent increase in places that don’t take cash at all. That seems to be the more prevailing trend.
I see it on occasion.
The merchant is trying to recover the cost to them of processing a payment with a credit card.
Also, there might be some tax shenanigans since it is harder for the IRS to prove how much money you made if you received it in cash.
But, these days, CCs are so ubiquitous that most merchants just deal with it. I remember in Chicago when taxis technically could use CCs for payment but almost all drivers had magically malfunctioning CC machines and would only take cash. It became a habit to ask when you got in a taxi if they would accept a credit card. Then Uber came along which made payment a breeze and all of a sudden taxi drivers became less reluctant to accept a CC.
Still, I know of a couple places (restaurants) that will ONLY take cash even now. (Charlie Beinlich’s in Northbrook, IL and Big Chicks / Tweet in Chicago).
Some of the cities in my area have stopped accepting cash for tax and water bills. Unlike a store, this IS a debt so I’m surprised it’s legal. My only guess is that is that they’re using a technicality to define it as something other than a debt to get around that.
They’ve also stopped working with local banks, which would allow you to make a cash payment there.
The only places around here I’ve seen offer a discount for cash are a few gas stations. That’s not to be confused with merchants who don’t accept plastic at all.
In a somewhat related trend, I recently had my credit card hacked, so I’ve been trying tpo pay by check, and I’ve run into several merchants who don’t accept checks at all.
Outside of B2B transactions, my store stopped taking checks 5 or 10 years ago. It got to be too much of a hassle to chase down people that, be it by accident or on purpose, write bad checks. At one point, we had two large checks get returned, written by people who had been in and out of jail over the years for writing bad checks. Those we’re the last two checks we accepted.
We used telecheck for a while, but it’s expensive and not always as helpful as it claims to be.
Not around here (metro South Florida). Other than at gas stations where different pricing for cash or credit has always been a thing. That’s far from universal, but also far from rare. Interestingly, that difference seems to apply only to the gasoline itself, not for anything purchased at the attached convenience store.
Many more businesses are credit only / no cash than accept either payment but with a cash discount. The former seems to be expanding and the latter has been rare and still is rare bordering on non-existent.
OTOH, I do see an increase of small Mom’n’Pop shops instituting a $5 or $10 minimum on CC transactions. Which can be a PITA when my typical purchase there is under the minimum.
I also wonder how this breaks down by SES and hard urban vs suburban vs exurban vs small town. I’m usually dealing with middle-class suburban or fancier. Things may be (probably are) different in other areas or demographics.
A few recent encounters:
A restaurant said they charged a 3% credit card fee. Upon presenting cash, the very embarrassed server said then it is a 3% service fee, and then admitted management just told them to call it a credit card fee, but they had to charge it on all transactions. Just raise the prices.
With service providers I always ask if there is a cash (check) discount.
- For some recent electrical work, no cash discount, but they do have a credit card fee
- A tree service had a cash discount which amounted to a hidden credit card fee
- A sprinkler guy says he prefers credit card, because even with the extra costs, when he has to be his own accountant, the simplicity and guaranteed payment is worth the expense
- Online payments to the state can be done by e-check/ach or credit card, and there is a fee for both. For the credit card it is $1-3 plus a percentage, and for the ach it is $1
There is a brewpub in Boulder called Mountain Sun that only takes cash. My rule is that I always need to carry enough cash to pay for dinner at Mountain Sun.
Trying to pay by check all the time seems like a lot of hassle to avoid the occasional instance of credit card fraud. My wife and I have each had a few cards compromised over the years. We’ve never been made to pay for the fraudulent charges, and the convenience of paying by CC as much as possible far exceeds the occasional trouble caused when a card gets compromised.
I do sometimes encounter gas stations that offer a discount for paying in cash. But that means I have to:
- walk into the store
- wait in line for the cashier
- hand over cash, and wait for them to authorize the pump
- walk back to the pump
- after pumping, walk back into the store
- wait in line again to see the cashier
- wait for cashier to give me my change
- walk back out to my car
If I’m buying $50 of gas and there’s a 3% discount for paying in cash, then I could save $1.50. I’d rather save my time by paying with my credit card at the pump.
Retailers used to be forbidden by their contracts with the Credit Card companies from offering a cash discount. This was changed in 2010.
The Durbin Amendment, included as part of the 2010 Dodd-Frank law, permits businesses to transfer all or a portion of their processing fees onto their customers. Thanks to the amendment, companies can now legally offer a discount to those who pay with cash or check instead of credit or debit card. There are only six states that currently prohibit surcharging- Colorado, Connecticut, Kansas, Maine, Massachusetts and Oklahoma.
Interesting, because I actually thought it was just a CFPB rule that changed. Anyway, retailers have had 13 years now to implement cash discounts if they want. Keep in mind that processing cash comes with its own costs as well.
Up here credit card acceptance is near obsequious. I think it’s more likely to find a non-cash only place than a cash only place.
Cheques for consumer to business has been obsolete here for years largely because we had a national debit network more than a decade before the US. I don’t know how long it’s been since I have seen someone pullout a chequebook in a store. My last personal holdout was my old school gardener, but one of his kids set him up to receive electronic payments last year.
For anyone interested in exploring all this from the retailers POV, this thread from 6 weeks ago is worth a look:
Obsequious?
I just had an Etsy vendor request a check (for a custom order), and I had to spend some time trying to find my check book. I haven’t regularly written checks for probably ten years or more.
Yes, I have. At least a couple of local restaurants and the vet charge more if you pay by credit card. I assume this is because the credit card companies are taking too big a bite out of their revenue.
I really need to watch auto-correct. Ubiquitous was what I had meant.
It was funny though!
One of our local gas stations - GetGo, tied to the Giant Eagle supermarket chain - gives you a $.10-.30 per-gallon discount if you use AdvantagePay. This requires you to connect your bank account to your loyalty card, basically turning your loyalty card into a debit card that can only be used for gas at GetGo.
I assume this is a good deal for the gas station, with a fee reduction on their end. Or maybe not, maybe it just is a good way to get us to be extra loyal to GetGo (it totally works).
I see other gas stations have separate loyalty-card-related gas discounts advertised on the pricing sign, but I don’t know how those work, if they require the banking info or not. I know that with Speedway their discount is only 5 cents and it’s just for using the loyalty card. You still pay with an independent card or cash.
When my Wife and I go out to eat, I’ll pay the bill with a CC, but often give the tip in cash. Waiters/Waitresses are overworked and underpaid IMHO. And if the crew needs it, it’s right there.
Purple and clairvoyant?
Of course back in the day that was part of the marketing for credit cards.
Only the elite had them, and when you whipped out your Diner’s Club or Amex card, the maitre’d would immediately upgrade their impression of you, and obsequiously escort you to their finest table and bring free appetizers.
Or so the ads strongly implied.
Later ads, once cards were ubiquitous with ordinary consumers, I recall one brand loudly advertising that theirs was the card that delivered you “clout”. One again all the retailers would bow and scrape before the mighty awesomeness of your MegaBanCorp MasterCard! So there.