Adding Fee for Credit Cards?

[DirtRoads]

Several stores around my area are doing this now.   I'm doing a show, The Canton Mississippi Bi-Annual Flea Market.   I'm  not in my usual location so don't expect as many sales.  I am considering adding 10%, 7% sales tax and 3% Credit Card fee.    I've always had "cash only" signs up.     I'm wondering if anyone else has done this?   I'm also considering adding 3% in my store as well.

I believe in a matter of 2 years or so, most retailers will be adding this fee.

 

[Callie Beller Diesel]

Our banking laws are different here, and we’re not allowed to add a POS surcharge onto card sales.  I’ve always viewed credit card fees as part of my COGS, and just incorporated it into the sticker price. I’ve seen a few people offer cash discounts, but that’s becoming more and more rare.

Taxes are taxes, and the government gets bent at me in ways I don’t like if I don’t collect and remit.

 

[Mark C.]

Its now legal to do this now.(pass the fees on)  Most around here do not do this yet.If the public is used to it no big deal. I always add tax no matter what.

I have never done it and am almost out of shows-only one out of state show left this summer-then only a local show moving forward.

[LeeU]

I don't do volume sales and I like to keep my life simple, including the math.  Sales tax is easy to do in NH--we don't have any! As a customer, I usually prefer the various fees to be rolled (at cost) into the price of the item. Shipping costs are so all over the place I would rather deal with a much higher price on the product than deal with the visual sticker shock of a through-the-roof shipping charge that might even exceed the cost of the item.   

[Bam2015]

As a consumer, I am insulted when I am charged an additional fee for using my credit card. Credit cards are not a novelty, so sellers should expect that the majority of their customers will be paying with cc.  I feel that the establishment should build this into their expenses. I know what to expect in terms of sales taxes, but I don't want to arrive at the cash register with my credit card out and then be told that I need to pay more, which to me feels like a penalty for using my credit card.

My two cents, which I'll be paying by credit card please.  

Betty

P.S. it use to be that credit card companies prohibited the seller from penalizing the customer and could take away charing privileges, is this no longer true? 

[Mark C.]

P.S. it use to be that credit card companies prohibited the seller from penalizing the customer and could take away charing privileges, is this no longer true? 

 

That law was erased a few years ago and merchants can now pass the fees on to consumers. It country wide

[Callie Beller Diesel]

I think there’s nothing wrong with increasing your prices to reflect increased business costs, which credit card fees definitely are. But from a customer service standpoint, and even a general professionalism one, I think it’s better to just roll it in.

1) I don’t want to put myself or an employee in a position that sets up angry “what the heck is this extra fee? Are you trying to scam me?!” conversations. There is a segment of the population that just wants to fight with retail workers, and I have no patience for being on the receiving end of it anymore. It’s best to prevent as many scenarios like this as possible. 

2) An itemized list of all of my expenses is really none of my customer’s business. They don’t need the gory details.

[neilestrick]

It's 2022, and no business should be complaining about credit card fees at this point, or adding to the price IMO. Fees have been steady at roughly 3% for years and years, so I don't know why they're suddenly having a fit about it. It's a given at this point that the vast majority of one's customers are going to pay by credit card, so you set your prices with that in mind. If someone pays cash, great, you make any extra 3% on that sale. Nearly every kiln I sell to anyone other than a school is paid for by credit cards, which means up to $200 in credit card fees with each kiln. Any discounts I give take that into consideration. I sold a large kiln last year that had over $500 in credit card fees, so that greatly affected the discounts I could give. It's a cost of doing business in the modern world, no different than the cost of shipping, packing materials, overhead, etc.

The better option to encourage cash sales is to raise your prices to cover the credit card fees and then offer a 3% discount for cash. People respond better to rewards than punishments.

[DirtRoads]

I know this store owner pretty well.  He is extremely knowledgeable and well educated.   I was surprised by this.    He and I talked (quietly where no other customers heard) and he said it's illegal to offer a discount for paying cash.   And legal to add a credit card fee.   I'll have to admit I was surprised.   I've heard of it.     I have never taken credit cards at Canton MS because so many people around that  cell service is sketchy.  If I do take cards, I'm definitely adding 7% sales tax.   I've always paid sales tax on my cash sales but don't do the math to add it.   We had a close money machine to my show location and someone once pointed out, they were paying "extra" to go to the machine.  But they sill bought it.

I'm glad I asked this question.   Back 2 years ago I would have been shocked at such.   My brother was just telling me he was somewhere at a restaurant (out of state)   and they added sales tax, tip AND credit card fee.  20% tip, 8.5% sales tax, and 3% processing fee.   Someone else in my family mentioned at dinner they had paid a  credit card fee somewhere and it was just on the bill, not mentioned.   I think it was a restaurant too.    They didn't notice it until later.  My Aunt was outraged about it.   The younger ones around didn't seem to care.  Gen Z & Millennials   I guess.

I always thought as Neil does, it should be added in your price.   But I see this as a  coming trend.    As for my situation, I had plans to use my bank card and the owner said "just write a check".   I said I'll go get one.    He  knows my brother's office is  less than 1/2 mile from his location and  said "Frank can just drop me a  check tomorrow or whenever. "    I said okay.  So I left with the merchandise, paying nothing.  But he had several customers using cards.    None of them were told to use a check.  But I went by my brother's office, got a check and went back immediately and paid.

I don't agree with it, like all of you, but I do see this coming.

Edited May 5, 2022 by DirtRoads

[Clay17]

1 hour ago, DirtRoads said:

he said it's illegal to offer a discount for paying cash

It's legal in all 50  states to offer a cash discount as long as you notify before their purchase. Just have a sign that says so in easy view.

Quote

Cash Discount programs are legal in all 50 states per the Durbin Amendment (part of the 2010 Dodd-Frank Law), which states that businesses are permitted to offer a discount to customers as an incentive for paying with cash.

I've been accepting credit cards for over 30 years and I assure you the fees are cheaper today than when I started

I had a customer this weekend while paying cash for a mug say to me if she had more cash she would buy more but hated paying the 3% CC fee everyone charges for using a CC.  I told her I don't charge that fee but I do charge sales tax. She walked off with $300+ more worth of pots. Why would one quibble for paying $9 to get an extra $300 in sales?  (Or $30 for each $1000 in sales for that matter)?

[DirtRoads]

@Clay17

1 hour ago, Clay17 said:

It's legal in all 50  states to offer a cash discount as long as you notify before their purchase. Just have a sign that says so in easy view.

I've been accepting credit cards for over 30 years and I assure you the fees are cheaper today than when I started

I had a customer this weekend while paying cash for a mug say to me if she had more cash she would buy more but hated paying the 3% CC fee everyone charges for using a CC.  I told her I don't charge that fee but I do charge sales tax. She walked off with $300+ more worth of pots. Why would one quibble for paying $9 to get an extra $300 in sales?  (Or $30 for each $1000 in sales for that matter)?

the 3% CC fee everyone charges for using a CC

Is this common now at shows?     I have no idea if this is being used that much.    Nice you got an extra $300 and yes so worth it.

Yeah thanks for the clarification on legality of cash discounts.    I started my first business in 1989.    I  always thought you couldn't do it.

[neilestrick]

I have shows that are 80% CC sales, and other shows that are 80% cash sales. It just depends on the area and clientele. I find that a good percentage of people at art fairs understand that using a CC costs us 3%, and they try to use cash as much as possible. But by early afternoon most people are out of cash and if they really want something they're going to use a card, although they tend to apologize. At least 75% of the money that goes through my business is via credit cards, and always has been.

[Roberta12]

29 minutes ago, neilestrick said:

I have shows that are 80% CC sales, and other shows that are 80% cash sales. It just depends on the area and clientele. I find that a good percentage of people at art fairs understand that using a CC costs us 3%, and they try to use cash as much as possible. But by early afternoon most people are out of cash and if they really want something they're going to use a card, although they tend to apologize. At least 75% of the money that goes through my business is via credit cards, and always has been.

I do not do as many shows as many of you, but my average is 1/2 cash 1/2 CC.  Pretty much everywhere I do shows.  I think the urban areas may be higher in CC sales.  I agree with Neil.  CC fees are simply a cost of doing business.  

r.

[GEP]

On 5/5/2022 at 10:33 PM, neilestrick said:

although they tend to apologize.

People apologize for using a credit card? I’m a little jealous. Here on the east coast it is totally taken for granted. Maybe a few times per year, a customer will ask if I prefer a check, because they know about credit card fees. I’ve done two shows this year so far, and like I said in a different thread, cash usage is coming back, up from 0 last fall. At one show it was 6.6%, and the other show was 1.5%. I’ve just accepted that I have to pay to use Square. 

[Mark C.]

West coast shows for me  have always been 1/3 to  a bit more cash-the pandemic years a  bit less cash

[Denice]

We have dined at several of our local restaurants and been charged credit card fees.  We have also been charged on quite a few of our online purchases.   I  have a 2 percent back credit card,  as long as you keep your credit card paid off every month you are only paying 1 percent.    Denice

[Clay17]

On 5/5/2022 at 10:06 PM, DirtRoads said:

Is this common now at shows? 

My booth is pretty busy during shows so I usually don't get to walk around much, I'm mostly going by what buyers say to me. If I had to guess the more urban a show is the more likely that fee is added. IMO it does more to hurt sales than it does to increase revenue.

[neilestrick]

On 5/16/2022 at 10:01 AM, Clay17 said:

IMO it does more to hurt sales than it does to increase revenue.

I agree. Make it easy for your customers to give you money.

I had a neighbor at a show who refused to take credit cards. She only did 4-5 shows a year so she didn't want to mess with it, and said many times that the 3% fee was highway robbery. All weekend long I saw people asking if she took cards and and then walk away when she said no. She could have sold another $500 of her work for $20 in fees.

[Mark C.]

If you are not taking cards you are leaving $$ on the table. I do not add a fee for cards-I''m not in urban environs ever anymore show wise.Usually a big line with two of us-one wrapping the other taking the funds.The whole business is a happy business -people buying pots are usually happy-pots they sell themselves-.

If I was ever going to think about adding a fee I would just up the pottery prices and not mention any fees-extra fee are not happy

In a smaller home town show its about the same with less people -but thay are still happy

 

[Callie Beller Diesel]

I also think that your customers don’t need the gory details of your pricing formula. Its not that I think we need to lie about things or not be transparent when necessary. It’s that presenting any additional charges, whether it’s adding shipping to checkout or sales tax or credit card fees, is drawing unnecessary attention to something no one really likes. It generates a feeling of misrepresentation when you keep adding things to the price tag, and that can be really frustrating (or worse) for some. I don’t want my customers frustrated, I want them happy so they come back. I don’t want to generate more opportunities for myself to have to smooth ruffled feathers.

[ThruTraffic]

On 5/4/2022 at 10:26 PM, Bam2015 said:

As a consumer, I am insulted when I am charged an additional fee for using my credit card. Credit cards are not a novelty, so sellers should expect that the majority of their customers will be paying with cc.  I feel that the establishment should build this into their expenses. I know what to expect in terms of sales taxes, but I don't want to arrive at the cash register with my credit card out and then be told that I need to pay more, which to me feels like a penalty for using my credit card.

My two cents, which I'll be paying by credit card please.  

the seller from penalizing the customer and could take away charing privileges, is this no longer true? 

Agree 100%! Credit card transaction fees are charged to the seller and should be paid for by the seller. If you're operating a business you should have enough business education to know about COGS (Cost Of Goods Sold). CC fees should be part of those calculations and NOT a method of punishing a certain section of your customer base for using a service YOU are providing. If you don't want to pay CC fees then don't take credit cards. Nuff said.