Thursday, March 30, 2006

Cheaper with Cash

TV station WSAV in the Hilton Head/Savannah area has a report about a local gas station chain, Enmark, that is charging customers 3 cents less per gallon if they pay with cash versus a debit or credit card. The report also mentions a local restaurant that won't let customers pay by credit card unless the check is at least $10.

I'm not a lawyer, but it may be against the law for a merchant to charge credit card customers more than it charges cash customers. If it's not against the law, it's at least against the agreement that the merchant signed in order to be able to accept credit cards.

It's fine for merchants to not accept credit cards at all, but I don't think they can accept credit cards and add a surcharge if you use them.

Likewise, I think merchants are breaking their agreement with the credit card companies if they refuse to accept credit cards for purchases of a certain amount. Credit card companies are definitely trying to get you to use your credit card for smaller and smaller purchases, so I'm guessing they're not too happy about this practice that some merchants are doing.

There's an interesting fight brewing there. Merchants think credit card companies are gouging them with fees while preventing them from putting surcharges on credit card purchases. Credit card issuers and processors say merchants want the ability to accept credit cards without paying a fee for the service. Index Credit Cards did a rundown of this issue last month when a merchants group successfully got Discover to drop its "no surcharge" rule.

That issue's a long way from over.


At 6:06 PM, Anonymous Anonymous said...

Over at the credit boards there are lots of discussions about violations by merchants of MC/Visa's policies. Including minimums.

At 3:42 PM, Blogger kerblam! said...

While it is against the merchant agreement to charge more for using a credit card, it's a simple matter to rephrase it as saying, 'cash discount.'

This was de rigeur for gas stations until about 10 years ago. (This is why older pumps show two lines, "credit price" and "cash price," even though now are both the same..well, except this place, I guess.)


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