Current Events > Seems like most small businesses wants you to pay 4% fee if you use credit cards

(+) Yeah! (+)

They changed some federal laws within the past year or two allowing it. I know restaurants made the serving staff pay for the credit card processing fees for years now. So are they double dipping then?

The most recent example of this is my cousin having dinner at some upper-scale steakhouse. The entrees were at least $50 minimum. They charged him 4% fee to use his credit card.

Ive seen this sort of at pizza places. You have to spend a minimum amount (say $10) if you want to use a credit card at all.

It's for the service fees that the business usually pays. Small businesses don't typically pull in enough profit to handle these fees on their own, so they're forced to add an upcharge on the customer so they don't end up actually losing money on a sale, especially a small one where the total is less than the service fee they'd need to pay the credit card company.

Service fee

Billing fee
Fee fee

I'm having flashbacks to the multiple fee fee joke on Drew Carey.

https://www.indystar.com/story/money/business/2022/04/25/credit-card-fees-processing/7413110001/

It's better to charge the people (credit/debit card users) who directly increase costs, than to punish everyone else (cash) as well.

I avoid small businesses and indy pizza shops/restaurants anyway. If the Chinese food buffet I go to starts doing that fee I'll quit going there.

Charging a percentage of the cost of what you are buying should be a felony. It costs the same amount of money to electronically process a credit card swipe whether you are spending ten dollars or ten thousand dollars. It should be one flat fee for every transaction regardless of cost. It's also ridiculous in the first place considering everything is going digital now and some cities/states/industries are trying to eliminate cash altogether.

ExtremeLuchador posted...

I avoid small businesses and indy pizza shops/restaurants anyway.

Why

Non-chain restaurants have literally the best food

I guess this is common everywhere in NYC now.

There are some restaurant businesses here in California that have minimum purchases like $10's to offset the fee because it burns into the profit otherwise. I don't think any of them started charging a 4% fee yet.

[LFAQs-redacted-quote]

Yes.
It's the same payment processing chain, but it just ends in an automatic payment. That's why "Visa" is in the corner.

[LFAQs-redacted-quote]

Debit cards use the VISA or Mastercard network for purchases so I guess so.

Idk about elsewhere, but here in NY, it's tricky how you overcharge. It has to be clearly communicated beforehand that there's a surcharge and not when you're actually paying. Otherwise it violates state law.

Generally the best way to do it here is to charge everyone CC prices and then discount for cash.

However, $10 minimums have been around since the 80s. Generally, many small businesses in NYC, especially food joints, simply don't accept cards at all, and make you get cash from an ATM.

I could see them accepting it nowadays because of increased pressure and then fucking up the fees and laws involved. None of my usual places are doing it, but NYC is huge.

archedsoul posted...

Idk about elsewhere, but here in NY, it's tricky how you overcharge. It has to be clearly communicated beforehand that there's a surcharge and not when you're actually paying. Otherwise it violates state law.

Here in Missouri, "4% charge for credit cards" is a sign on the door.

Questionmarktarius posted...

Here in Missouri, "4% charge for credit cards" is a sign on the door.

Yeah, that's the minimum requirement here too. But if it's only posted at the cashier when you're ready to pay, it violates NY law.

4% processing fee, 5% cash back. Though, still losing potentially thousands of dollars a year...

ChocoboMog123 posted...

Though, still losing potentially thousands of dollars a year...

Credit cards more than make up for it on the inverse-whales, who only pay the minimum for decades.

Anyways a restaurant charging over $50 per plate and $7 for Budweiser is lame for charging credit usage fees.

ExtremeLuchador posted...

Anyways a restaurant charging over $50 per plate and $7 for Budweiser is lame for charging credit usage fees.

With inflation increase of cost and small businesses not having the massive amount of assets to negotiate better pricing, it doesn't surprise me if they're charging that much.