That's not far off from what the merchant is losing for credit card customers, so their options are:
1. Charge the same for credit cards as cash, and make cash paying customers effectively pay more, thus applying a regressive tax to the poor (who are less likely to have credit cards)
2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash.
2 is obviously better, and I would rather go to stores that take 2 than ones which choose to charge everyone more, effectively to the detriment of those worse off.
It's not whether the behavior is logical or justified. It's that fast food is no longer worth the price you're expected to pay for it. Regardless of whether it's credit card fees or labor costs or energy costs causing prices to go up, the economics of fast food no longer make sense for the customer.
But also I don't understand why a cash customer paying the same price as a credit card customer should be considered paying more. The customer only cares how much they have to pay, they don't care about or feel entitled to a constant profit margin.
Would a customer paying cash ever switch to credit card just because they've learned the business profits more from the cash sale? No, of course not.
> 2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash.
Things may have changed in intervening years but about 20 years ago I owned some quick serve restaurant franchises, and the credit card companies banned charging a fee to customers for use of credit cards - there was essentially a most favoured nations clause in the agreement. If you were caught doing this they would terminate your service permanently.
Electricity and so on are already included independently of the payment method.
Yes, the store should be charging enough to its customers that it can afford electricity, and if it can't afford electricity, it should increase its prices.
It's not worth trying to account electricity use per-customer though, obviously, and it typically won't really vary by customer much anyway.
Credit card fees on the other hand do vary by customer, and can trivially be attributed to a single transaction accurately.
If you run a cafe, and one customer orders an espresso and the other orders a latte, are you not allowed to charge them differently?
Buying milk to make lattes is also a cost of doing business, but it's a cost that is only driven by people who buy lattes, so you pass the cost of milk on to latte buying customers and not espresso buying ones, right?
Credit cards are the same as milk here, only people using them cost you money.
Should all foods and drinks in a restaurant cost the same because otherwise you're passing on the cost of buying ingredients and staff labor, i.e. "the cost of doing business" on to customers unevenly?
Now I have seen it all - comparing a method of payment to milk might just be the greatest thing I have ever read on HN and that is ... something for sure ...
so let's try again - I am buying a product or a service. It is exactly the same product, same "milk" if you will :) now the business is telling me that based on the method of payment I choose (who the F carries cash around in 2024/25...) I will be charge _different_ price for the _same milk_? that ... makes absolutely no sense.
of course the business itself can choose to charge me extra 3% if I pay with Visa or 15% if I bring a goat to barter with but of course I am going to pick my ass up and head on over to a competitor who won't charge me 3% or 15% extra
> it is cost of doing business and you can’t pass that shit off to customers
If a business doesnt pass on its costs of doing business to customers, they will go out of business. The cost doesn't need to be passed on as a fee or surcharge, but it does need to be passed on.
I don’t think you understand. Per your other comment:
> it is cost of doing business and you can’t pass that shit off to customers
What do you think prices are? They are the costs to the business plus some profit margin. Visa is passing their costs down to their customers too.
Businesses are completely within their right to pass the CC charges on to customers. It becomes the customers’ cost of doing business with their preferred method of payment.
That's all fine - businesses can be within their right to do whatever they please. However, myself and myriad of other people will simply go elsewhere where we are not charged different for the same product/service depending on the method of payment we choose :)
I stopped needing gas long time ago but if I needed gas I sure as heck am not going anywhere where I can save $0.10 to pay in cash (probably spend 2x that in gas needed to get to the gas station to save $0.10 per gallon). or for that matter ain't going to any place that has a different price depending on my method of payment.
I was also going to say, between the Costco executive membership's 2% rebate, and CC incentives, it's probably a wash anyways between that or the 10¢ difference.
Exactly. The Visa fees are a percentage (sometimes plus a per-tx fee as well). Electric bills don't usually double when the customer spends twice as much.
The distinction I meant to make is the "cost of doing business" is all the things required to do whatever your thing is.
The food ingredients, the building rent, the electricity and cooking gas, those are all required to make the burrito, every burrito.
The credit card exchange fee is like chocolate sprinkles on ice cream. It's a completely seperate and optional thing. This totally seperate company offers an extra service you may or may not want to add on top of your burrito.
That's nothing at all like the electricity, and is not at all part of the cost of doing business. It's the cost of doing an entirely seperate business.
An interesting thought experiment: what if a store let you pay by bank wire (let's say $20 fee)
Would you stick to your guns and say that cash users have to subsidize expensive wire fees? Or is that too much, and the fairness ends at subsidizing the expensive credit card fees? If so, why the distinction? If you could pay by bitcoin, should cash users pay the bitcoin transaction fees too? :)
Also, do you really think 3% is a fair tax on the entire economy that we should be giving to the duopoly of MC/Visa, when they only charge 0.3% in most of the rest of the world? The only reason they charge so much here is because they can get away with gouging due to our non-functional regulatory environment. I don't know why so many people accept 3% as a law of nature or something when the cost of handling cash is far less than that.
if paying by bank wire costs $198 and you want to offer it as a method of payment - it is on YOU.
amazing people here don’t understand that there is a cost of running a business. you don’t want to pay Visa 11% - don’t. you don’t want to pay apple 30% - don’t make ios apps. it is that simple mate
So your point of view is that businesses shouldn't be allowed to give customers choices that have different costs and charge them fairly? Every option has to cost exactly the same for everyone?
How do you feel about shipping options then? Should Amazon charge the same for 5-day ground as they do for overnight shipping?
you do realize you are comparing apples to oranges? charging customers for usage of credit card is specifically forbidden so any business doing is in breach of contract!!
this has nothing to do with shipping options. you cannot charge me money for using a credit card mate, it is 2024 (soon to be 2025).
1. Visa/MC should be allowed to overcharge and we should all accept it because Visa/MC said so in their contracts.
2. You like using credit cards, and things that you personally like should be free in 2024, and other people should pay extra to subsidize your personal preferences.
I'm not convinced. I don't think your personal preferences will be enough to reverse the trend of businesses charging fair prices for different payment methods either. But you're welcome to try.
> the businesses should however offer it and pay whatever that costs
So, in other words, you're in favor of a minor tax on those worse off than you, with poor credit score or otherwise can't get a credit card, so that you don't have to think about how your credit card company is ripping the merchant off.
If the business doesn't write that "3% for credit card users" down, and 90% of their customers use credit cards, their logical next step is to instead increase the price of all items by 2.7%, which lets you save a minor amount of money by screwing over those who are worse off.
If you just actively want to worsen the life of poorer people for your own benefit, well, I guess you're at least on the right site for it. May I recommend applying for the YC spring batch.
> So, in other words, you're in favor of a minor tax on those worse off than you, with poor credit score or otherwise can't get a credit card, so that you don't have to think about how your credit card company is ripping the merchant off.
ugh I am not saying any of this... if you have cash - pay with cash. I do not want to get a benefit for paying with a card (though of course more and more places do not even take cash any longer) and when I say card I don't mean actual credit card, debit card works just as well. just don't charge me any different
> If the business doesn't write that "3% for credit card users" down, and 90% of their customers use credit cards, their logical next step is to instead increase the price of all items by 2.7%, which lets you save a minor amount of money by screwing over those who are worse off.
This is their problem, not mine. If they want to charge extra - that is fine. I won't pay extra. If every business charges extra than I won't have a choice but as long as there are places that don't I am spending my money there.
> If you just actively want to worsen the life of poorer people for your own benefit, well, I guess you're at least on the right site for it.
Where are you getting this from? why am I worsening life or poorer people?! What if a poor person does not have any cash on them but has a debit card - we gonna punish them for not carrying cash around?! It seems like you are arguing the opposite here or just assuming poor person = I carry wads of cash with me everywhere...?
In the US, credit card surcharges have been permitted since that contract provision was invalidated in 2013. There are some restrictions that vary by state. [0]
Since most people pay with cards these days [citation needed], it seems like it would go over much better if the 3% processing cost were built into the normal price, and then you offered a 3% discount (or 2.91% for you pedants out there) for people paying in cash. The card users don't feel like they're being nickel-and-dimed, and the cash users feel like they're being treated specially.
If you charge 3% just to credit card users, they are now subsidizing the cash customers. I am guessing you are assuming the cost of cash handling to be zero.
Not to mention, as someone who spent a few years in that industry, in many cases those cash customers are not getting reported to the IRS, or local authorities for sales tax.
So they could already be "saving" up to 10% or more on cash customers...
That's not far off from what the merchant is losing for credit card customers, so their options are:
1. Charge the same for credit cards as cash, and make cash paying customers effectively pay more, thus applying a regressive tax to the poor (who are less likely to have credit cards)
2. Charge more for the credit card paying customers, and they can avoid this extra payment by paying with cash.
2 is obviously better, and I would rather go to stores that take 2 than ones which choose to charge everyone more, effectively to the detriment of those worse off.