With the new law in place allowing Merchants to charge a "swipe fee" to cover the cost of Credit cards fees used during sales transactions, are you folks OK, with paying an addition, of up to 4% to purchase a Guitar or Amplifier?
Just for clarity's sake, I'd like to point out that the law doesn't exactly "allow" merchants to charge a swipe fee, though that is the practical upshot. Up until now, it was the credit card companies who prevented swipe fees via their terms of service, not the law. Retailers were not allowed to charge more for a product based on method of payment, as a condition of their contracts with the credit card issuers (Interestingly, Ed Roman used to break this rule, which is how I learned about it). The new law prevents the credit card issuers from enforcing those rules.
This really burns me up because retailers are trying to have their cake and eat it, too. Credit cards are good for merchants because credit card transactions are safer than keeping a bunch of cash on site, and they increase sales because consumers aren't limited to the amount of cash they're physically carrying at the time. Retailers want to take advantage of these benefits but don't want to pay the cost, which is hypocritical and short-sighted.
Sellers of big-ticket items like guitar amplifiers, appliances, electronics, etc. are especially benefitted by credit card transactions because someone visiting a store can drop a lot of money on an item right on the spot, without having to go get the cash first. This essentially turns big-ticket items into impulse buys, and avoids the danger that someone might leave the store with the intention of buying but change his mind and not come back.
That said, it's probably not the big-ticket sellers that will do this -- competition will likely keep them in check. But the little convenience stores and gas stations will definitely start charging. The argument in their favor is that the swipe fees they pay to banks are inordinately high for small purchases. The guy who just buys a soda is actually hurting business more than he's helping. But as I said, there's hypocrisy in this, because for every guy who just buys a soda, there's someone who is picking up $20 of junk food because he's free of the limitations of cash. These retailers want the convenience. They just don't want to pay for it.
You'll notice that some of these merchants have already started setting a minimum purchase requirement for people with credit cards. Again, this was prohibited by the issuing banks' terms of service, but the same new banking regulations now prevent the banks from enforcing that rule as well.
I've made it a point not to do business with merchants who charge me for their own conveniences, but that'll be harder to do if these new regulations remain in place.
]-[ @ n $ 0 |v| a T ! ©;46292 said:
I use an American Express for all major purchases. I do it because of the benefits I receive like airline points and a middle-man to protect me when the item I paid for is defective or not what I ordered. I've used the later benefit twice...
But those benefits cost someone money. Is that a Cost of Doing Business for you? Is that an insurance premium that should be paid by me? As I said... I can only answer that from a consumer's perspective.
My attitude is that the benefits to the consumer are covered by the interest rate. The benefits to the merchant are covered by his own fees.
]-[ @ n $ 0 |v| a T ! ©;46292 said:
Bottom Line (consumer perspective): If two merchants have a guitar I want and both have a street price of $3800 but one of the two is going to charge me sales tax, 4% Credit Card fees, and shipping/handling but the other guy is only going to charge me for shipping, then guy #1 gets my business.
I assume buy "guy #1" you mean the one who
isn't charging you the swipe fee? Because that's actually the second guy in your example.