Restaurants/Retailers Accepting Cash/Not accepting Cash and Charging a fee for Using a Card/ Labor Fee

[LFP57]

Stopped for breakfast in the morning before work at a place that I know only acepts cash, later that day, took the wife out to eat, signs states, pay cash and take 3.5% of the menu prices. I've seen other places charge a flat rate of 1$ for using a card. I've heard of places not accepting cash, haven't seen it around here yet, wonder if they mandate a credit card fee? Just seen a news story about a new fee restaurants are charging, one here in Michigan, it's a labor fee.
A restaurant could charge you a labor fee on top of a credit card fee and then expect a tip as well, does anyone really know what it costs a business to accept credit cards/ with associated fees and what kind of fees are you seeing in your area?

 

[ken erickson]

Things might have changed but when I was in business (1980 to 2002) the rate that I was charged for credit card transactions was 3%. That rate varied by the annual amount that I would run thru the credit card company. I was a small business and averaged about 375k to 475k in annual sales. I do not know or remember the percent of that which was CC transactions. If not mistaken the rate could have been as low as 1 1/2% .

I did not charge a "extra" fee if a customer used a CC nor offer a discount if they did not. The 3% was baked into my prices. Of course if I was negotiating a large purchase I knew would be paid by check I would take that 3% into account.

 

[dirtydeed]

Things might have changed but when I was in business (1980 to 2002) the rate that I was charged for credit card transactions was 3%. That rate varies by volume and if not mistaken could have been as low as 1 1/2% .

I did not charge a "extra" fee if a customer used a CC nor offer a discount if they did not. The 3% was baked into my prices. Of course if I was negotiating a large purchase I knew would be paid by check I would take that 3% into account.

I think you're right in your estimate of approx 3%.

Strangely, I didn't think it was legal for merchants to charge additional $ for credit card transactions...yet, you see it all of the time?

 

[ken erickson]

I think you're right in your estimate of approx 3%.

Strangely, I didn't think it was legal for merchants to charge additional $ for credit card transactions...yet, you see it all of the time?

At the time , at least in Missouri, I could not "add" a extra fee for a customer using a card but I could offer a discount if paid by cash or check. I know, a silly play on words right? I do not remember if that was state law or a rule imposed by Master Card on me as a merchant.

I am not sure what the laws are now and would guess it varies state by state and even among the banks offering CC's and what those rules are for the merchants accepting them?

 

[85Hokie]

Things might have changed but when I was in business (1980 to 2002) the rate that I was charged for credit card transactions was 3%. That rate varied by the annual amount that I would run thru the credit card company. I was a small business and averaged about 375k to 475k in annual sales. I do not know or remember the percent of that which was CC transactions. If not mistaken the rate could have been as low as 1 1/2% .

I did not charge a "extra" fee if a customer used a CC nor offer a discount if they did not. The 3% was baked into my prices. Of course if I was negotiating a large purchase I knew would be paid by check I would take that 3% into account.

The tread is around these parts too, cash is assumed (or check depending) where as a card will have a 3.X increase in price.

Most people do not carry cash - well, young people lol.

Gas is the same way - there is a cash price and a card price, what is weird is that the card price is only about 3-5 cents more, thus that 3% tax via the CC company is still costing the gas station.

I still say cash is king, however it depends on what castle you are in!

 

[ken erickson]

I would also say this.

The type of business I was in had somewhat of an impulse buy element to it, with prices for items that cost several hundred dollars. I always thought that the sales generated by accepting CC's offset any possible fees I owed to Master card. Sales I probably would not have made if I did not accept CC's.

 

[LFP57]

The tread is around these parts too, cash is assumed (or check depending) where as a card will have a 3.X increase in price.

Most people do not carry cash - well, young people lol.

Gas is the same way - there is a cash price and a card price, what is weird is that the card price is only about 3-5 cents more, thus that 3% tax via the CC company is still costing the gas station.

I still say cash is king, however it depends on what castle you are in!

True, at the gas pump one has a choice, however, some places are now not accepting cash and then there's the labor fee, no choice, cash or credit, you're paying the labor fee, I could understand why they may charge it in California, but here in Michigan, wonder how legal this is?

 

[skeets]

Problem with cash, at least around here is gas stations dont like it because they have been ripped off with funny money. Cash is king as far as I am concerned, but I am starting to wonder. A while back I got gas for the chain saw, and I paid cash. The girl behind the counter took out a pen of some kind and went over several 1 dollar bills. I said I could understand large bills but dollar bills, really? Seems several stations along the interstate had take in a bunch of fake 1 dollar bills. I mean if I am going to visit the gray bar hotel it aint gona be for a fake dollar bill!

 

[ken erickson]

The girl behind the counter took out a pen of some kind and went over several 1 dollar bills.

My local fleet farm , when paying cash, always uses the pen to check for counterfeit bills. When they give me my change I make them verify and use the pen on the bills they are giving me! lol. I am not sure they see the humor in that!

 

[Trimley]

While waiting for the fee to charge the fee. It's about the inconvenience, not the convenience. Soon we'll get charged for the tattoo that frees the fee. Chips anyone?

 

[jyoutz]

The tread is around these parts too, cash is assumed (or check depending) where as a card will have a 3.X increase in price.

Most people do not carry cash - well, young people lol.

Gas is the same way - there is a cash price and a card price, what is weird is that the card price is only about 3-5 cents more, thus that 3% tax via the CC company is still costing the gas station.

I still say cash is king, however it depends on what castle you are in!

I haven’t seen a gas station that is set up for cash sales in years. When they say cash/credit prices it means debit/credit cards. If you want to buy gas with cash, you have to pay the attendant what you think you will need before they turn on the pump and they will only authorize what you paid. Then you have to go back to settle up for your cash back or give them more cash to turn on the pump again if you underestimated the amount needed. What a hassle.

 

[Trimley]

I haven’t seen a gas station that is set up for cash sales in years. When they say cash/credit prices it means debit/credit cards. If you want to buy gas with cash, you have to pay the attendant what you think you will need before they turn on the pump and they will only authorize what you paid. Then you have to go back to settle up for your cash back or give them more cash to turn on the pump again if you underestimated the amount needed. What a hassle.

I haven't paid cash for any fuel related in years. At the place I go, many do. Their need to walk in to pay, inconveniences everyone else in the line. And as we all have likely seen, some lose their patience and do as they please. Which has turned chaotic. One-->Way becomes their way, then hell breaks loose and tempers fly.

 

[GeoHorn]

As either service-provider…or customer…. I always prefer CC…because, as provider, it offers security, record-keeping, and identification.…and despite the associated fees “up-front” ….(typically 3%)… the “cash-back” programs of the cards I use as customer provide adequate compensation/reconciliation for the convenience-factor.

Cash is troublesome for multiple reasons, some already renumerated.

 

[Speed25]

Different categories of companies pay different percentages for credit card fees based on the category assigned to the business by Visa/MC/AmEx. Our business is hit with ~7% fees from the CC companies, so we stopped taking cards altogether. I think we'll start taking them again, but offer a 7% discount for cash or check. I doubt many people will opt to spend the extra few hundred dollars for the "convenience" of using their card, but I've been wrong before. Our average transaction is $3k-$5k.

Thankfully, I haven't seen any restaurants charging extra fees. When they start doing so, I'll take my business elsewhere as I don't like being nickeled and dimed.

 

[GreensvilleJay]

interesting...
right from Mastercard....
A merchant must provide clear disclosure to the merchant’s customers of the merchant’s surcharging practices at the point of interaction, which shall include the amount of the surcharge and the dollar amount of the surcharge on the transaction receipt provided by the merchant to its customers.

NOTE they have to POST they ARE surcharging as well as the amount !!!

 

[Sidekick]

We are getting close to switching to digital currency in the US I read. Can't imagine cash being worthless and everything being tracked to one digital account within 10 years if the current studies become law. Sure will be hard to have a yard sale .

 

[GeoHorn]

I don’t trust “digital” currency….if that is what “bitcoin” etc etc is… It’ll be a retrograde to “barter”…which never works for a sophisticated economy.

 

[lugbolt]

I work for a dealer

paying cash will get you about a 5% discount on anything but wholegoods

kind of weird on wholegoods stuff, manufacturer has some to say in that stuff too. A little cash discount, but the way it works is that there is no haggle on cash sale, plus you have to pay sales tax when you register/license it. But if you finance it, you finance the tax in with it, sign it all, then go home and pay it off if the money is available. Simple. You don't get the cash discount but there is some haggle room that makes up for it, plus there are usually incentives for financed sales.

last time I bought a car I financed it. went home, waited a few days until everything was "in the system" then just paid it off. The other good side is that this type of electronic payments are not considered cash, so the IRS says that the bank doesn't have to fill out a CTR if over 10 grand. But the bank will request a ctr to be filled out if the dealer deposits over 10 grand in cash, and your name will be on it if you pay for a "large" (10 grand isn't as much now as it used to be) purchase.

mom just bought a new car, paid cash. There is zero haggle, and she was not eligible for some discounts because it was a cash sale. I see it daily but she didn't know about this stuff.

 

[LFP57]

Here's an article about a restaurant here in Michigan charging a "Labor fee." It happening in other states as well.

Is it Time for Michigan to Revamp How Tipped Workers Are Paid?

As concerns grow that Michigan's new minimum wage schedule may make it difficult for restaurants to stay afloat, one Michigan establishment is getting creative.

wcrz.com

 

[Benhameen]

Had a tablet repaired yesterday and they charged me a 3% fee for using my card. I personally don’t mind paying the extra fee. Especially for mom and pop type of businesses that can’t absorb the extra fees like the big box stores. If it were my business that fee would either be baked in or posted like the repair place.