End of Credit Card Rewards? [The Credit Card Competition Act]

[Scott5114]

When businesses charge the customer the 3% separately for using a card, they're just adding on to their bottom line because they can, and an insignificant amount of people switch their payment choice. That expense was already factored in to the product's cost.

The 3% additional charge is becoming more and more common at restaurants; I saw it both last night for dinner and this morning for breakfast.  I haven't accepted the practice; I pass that charge right back to the server in the form of a reduced tip.  A 20% intended tip on the pretax bill becomes closer to 16% because the 3% charge is applied to the sales tax as well.  Is it "fair" that I make the server pay?  Not really, but if management is adding this charge "because they can", I'm passing it on "because I can" as well.

I've read a lot about this becoming common and still have not found one in the wild, I just consider myself lucky.
That said, I think your approach is the best one. Restaurants need to just incorporate rising costs into the menu prices. Adding a CC fee feels like a dishonest practice used to get you in the door with seemingly lower menu prices.

Deducting the cost of the credit card surcharge from the tip is silly—you are essentially taking 3% of the server's wage and giving it to management. Doubtful the server had anything to do with the credit card policy, so you're just kind of taking your frustration out on an innocent bystander and management gets their money either way. (And if your belief is that "restaurants need to just incorporate rising costs into the menu prices", then that should be true of the server's wages as well and tips should go away entirely.)

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

[Big John]

How about this...  Imagine a business in a place that has been hit hard by global warming.  Their electricity bill has gone up dramatically due to increased a/c usage.  How would you feel about a "climate change surcharge" on your bill?

I have seen an energy surcharge on hotel bills in the past.

[kphoger]

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Wouldn't that affect the server even more?  Now you're not paying the tip at all.

[hotdogPi]

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Why wouldn't paying cash fix this?

[kphoger]

How about this...  Imagine a business in a place that has been hit hard by global warming.  Their electricity bill has gone up dramatically due to increased a/c usage.  How would you feel about a "climate change surcharge" on your bill?

I have seen an energy surcharge on hotel bills in the past.

Now let's imagine a restaurant that has such an "energy surcharge".  But diners who choose patio seating don't have to pay it.

[Scott5114]

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Wouldn't that affect the server even more?  Now you're not paying the tip at all.

Yes, but the person with the ability to fix the problem now has an incentive to do so.

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Why wouldn't paying cash fix this?

It depends on what your end goal is. If your goal is merely to not have to pay the fee yourself, then it's an acceptable solution. If your goal is to get the policy changed, it wouldn't be.

(Some people would object to this solution because they do not regularly carry cash and would thus have to make special arrangements to do so. And some people cannot access cash without incurring a fee, since their banks have no physical branches and cash can only be accessed from an ATM.)

[HighwayStar]

When businesses charge the customer the 3% separately for using a card, they're just adding on to their bottom line because they can, and an insignificant amount of people switch their payment choice. That expense was already factored in to the product's cost.

The 3% additional charge is becoming more and more common at restaurants; I saw it both last night for dinner and this morning for breakfast.  I haven't accepted the practice; I pass that charge right back to the server in the form of a reduced tip.  A 20% intended tip on the pretax bill becomes closer to 16% because the 3% charge is applied to the sales tax as well.  Is it "fair" that I make the server pay?  Not really, but if management is adding this charge "because they can", I'm passing it on "because I can" as well.

I've read a lot about this becoming common and still have not found one in the wild, I just consider myself lucky.
That said, I think your approach is the best one. Restaurants need to just incorporate rising costs into the menu prices. Adding a CC fee feels like a dishonest practice used to get you in the door with seemingly lower menu prices.

Deducting the cost of the credit card surcharge from the tip is silly—you are essentially taking 3% of the server's wage and giving it to management. Doubtful the server had anything to do with the credit card policy, so you're just kind of taking your frustration out on an innocent bystander and management gets their money either way. (And if your belief is that "restaurants need to just incorporate rising costs into the menu prices", then that should be true of the server's wages as well and tips should go away entirely.)

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Those actions are not mutually exclusive and presented with such a fee I would do both. However tips do serve to signal information, and if servers are repeatedly being hit with low tips after the fee is instituted that should come to the notice of management. Also servers are less willing to work in an establishment with policies that result in poor tipping. The fact that I would also refuse to go back is part of the fairness to the server, I'm not going to repeatedly short change them. I think the "just don't go there" is a fine practice, but with restaurants  sometimes the fee is not disclosed until you have already been seated and are getting ready to order, so its a bit harder to avoid them in the first place.

[jeffandnicole]

When businesses charge the customer the 3% separately for using a card, they're just adding on to their bottom line because they can, and an insignificant amount of people switch their payment choice. That expense was already factored in to the product's cost.

The 3% additional charge is becoming more and more common at restaurants; I saw it both last night for dinner and this morning for breakfast.  I haven't accepted the practice; I pass that charge right back to the server in the form of a reduced tip.  A 20% intended tip on the pretax bill becomes closer to 16% because the 3% charge is applied to the sales tax as well.  Is it "fair" that I make the server pay?  Not really, but if management is adding this charge "because they can", I'm passing it on "because I can" as well.

I've read a lot about this becoming common and still have not found one in the wild, I just consider myself lucky.
That said, I think your approach is the best one. Restaurants need to just incorporate rising costs into the menu prices. Adding a CC fee feels like a dishonest practice used to get you in the door with seemingly lower menu prices.

Deducting the cost of the credit card surcharge from the tip is silly—you are essentially taking 3% of the server's wage and giving it to management. Doubtful the server had anything to do with the credit card policy, so you're just kind of taking your frustration out on an innocent bystander and management gets their money either way. (And if your belief is that "restaurants need to just incorporate rising costs into the menu prices", then that should be true of the server's wages as well and tips should go away entirely.)

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Those actions are not mutually exclusive and presented with such a fee I would do both. However tips do serve to signal information, and if servers are repeatedly being hit with low tips after the fee is instituted that should come to the notice of management. Also servers are less willing to work in an establishment with policies that result in poor tipping. The fact that I would also refuse to go back is part of the fairness to the server, I'm not going to repeatedly short change them. I think the "just don't go there" is a fine practice, but with restaurants  sometimes the fee is not disclosed until you have already been seated and are getting ready to order, so its a bit harder to avoid them in the first place.

If you want to stick it to the store, when you leave inform a manager that you would've purchased an additional app or dessert, but you had to hold back due to the extra credit card charge.  Those are high profit items.  Doesn't matter if it's true; if you didn't purchase an app or dessert you can use that line.

Unfortunately, most people are going to go with 'lookin's route.  It's not confrontational, but it hurts most the person that has nothing to do with the policy.

[kphoger]

If you really want to protest the credit card fee, the most effective way to register your disapproval is to stop doing business with the restaurant, as that focuses the negative outcome more squarely on the person responsible for the policy.

Wouldn't that affect the server even more?  Now you're not paying the tip at all.

Yes, but the person with the ability to fix the problem now has an incentive to do so.

Or, instead, to reduce the server's base wage.

[kphoger]

If you want to stick it to the store, when you leave inform a manager ...

Best way to voice pretty much anything you have to say about anything.

[jeffandnicole]

I first started noticing this at gas stations, not restaurants:  different prices per gallon for cash vs credit card customers.  This is clearly passing along a cost of doing business to the customer, not just a price increase at the pump.  Or is it?  Without it, I suppose, the new price at the pump would simply be between the two instead.

In my observations, the cash price at stations is often the same price at stations that don't have different prices for cash/credit.  The merchant fee is already included within that price; the stations are just getting a dime more from customers using credit.

I've always laughed at this station's pricing.  https://maps.app.goo.gl/hqd1UE6SFEdJCVYj6 . Their credit price is always just a penny more than the cash pricing.  Not 10 cents.  Not 8 cents.  Just 1 cent.  I don't know why, because obviously the credit card pricing fee is greater than a penny.  For more amusement on another subject, this station is located within the middle of a jersey traffic circle; one of the few exclusively on county roadways.  If you zoom out, the large boulders that are there is a preventative measure; the pumps closest to the camera were recently hit by a wayward car last year.  This station has existed within the circle for 40+ years; first time that ever happened to them.

[Scott5114]

Those actions are not mutually exclusive and presented with such a fee I would do both. However tips do serve to signal information, and if servers are repeatedly being hit with low tips after the fee is instituted that should come to the notice of management.

Should, yes... However in my experience this conversation goes like this:

"Hey, boss, I thought you should know since X was changed tips have gone down."
"Well, tips aren't guaranteed."
"Yes, I know, but I thought that was important for you to know because it means the customers are unhappy."
"Sure. Go back to the floor."

[the policy is never changed]

[hotdogPi]

I actually support cash/credit differences, being a cash user myself.

One business (since moved):


I've noticed that many of the takeout pizza/sub places will simply round down (always down) to the nearest 50 cents if you're paying cash. One of them does so even though they already have a 4% credit card fee.

[kalvado]

Credit card fees should definitely be a part of cost of doing business. Going cash may save on fees, but isn't totally free on bank side (until business wants to do some tax free operations paying cash down the line), and adds risks of loss from cashier/server  fraud or good old robbery. 
There may be other issues with credit cards - delays in payout, card fraud, maybe something else. I suspect payout terms - something like NET30 probably? - would be the biggest one.

[kalvado]

Those actions are not mutually exclusive and presented with such a fee I would do both. However tips do serve to signal information, and if servers are repeatedly being hit with low tips after the fee is instituted that should come to the notice of management.

Should, yes... However in my experience this conversation goes like this:

"Hey, boss, I thought you should know since X was changed tips have gone down."
"Well, tips aren't guaranteed."
"Yes, I know, but I thought that was important for you to know because it means the customers are unhappy."
"Sure. Go back to the floor."

[the policy is never changed]

Good luck figuring out which X is the problem. Is there is some cost cutting in the kitchen - reduced serving, longer wait, quality? Did a local big business had a layoff and some loyal customers disappeared? Maybe weather is good and people are grilling and going to picnics instead of sit-down places?

[jeffandnicole]

Credit card fees should definitely be a part of cost of doing business. Going cash may save on fees, but isn't totally free on bank side (until business wants to do some tax free operations paying cash down the line), and adds risks of loss from cashier/server  fraud or good old robbery. 
There may be other issues with credit cards - delays in payout, card fraud, maybe something else. I suspect payout terms - something like NET30 probably? - would be the biggest one.

Companies accepting credit cards get their deposits within a few days at most. They're not waiting on the customer to pay their bill and then the credit card company paying them.

Those actions are not mutually exclusive and presented with such a fee I would do both. However tips do serve to signal information, and if servers are repeatedly being hit with low tips after the fee is instituted that should come to the notice of management.

Should, yes... However in my experience this conversation goes like this:

"Hey, boss, I thought you should know since X was changed tips have gone down."
"Well, tips aren't guaranteed."
"Yes, I know, but I thought that was important for you to know because it means the customers are unhappy."
"Sure. Go back to the floor."

[the policy is never changed]

Yep. I'm not sure how many people here had a job as an hourly employee where they had any significant effect on changing payment policies. Servers, if they had any say, would start with their minimum wage, not their employer's credit card policy.

[kphoger]

When a cashier asks if they should run my card as credit or debit, I answer:  Whichever is better for you.

[hbelkins]

The garage out the road, where I have my car serviced, tacks an additional 3 percent onto the bill if you pay with a card.

So, too, does pretty much any government office in the Commonwealth of Kentucky.

[formulanone]

How about this...  Imagine a business in a place that has been hit hard by global warming.  Their electricity bill has gone up dramatically due to increased a/c usage.  How would you feel about a "climate change surcharge" on your bill?

I have seen an energy surcharge on hotel bills in the past.

Now let's imagine a restaurant that has such an "energy surcharge".  But diners who choose patio seating don't have to pay it.

"I'm sorry sir, but I don't know how to take that charge off the bill."
(but you might be able to argue with a manager in 20 minutes time and later see if it was worth it)

[HighwayStar]

Yep. I'm not sure how many people here had a job as an hourly employee where they had any significant effect on changing payment policies. Servers, if they had any say, would start with their minimum wage, not their employer's credit card policy.

I've had management that had an open door policy and was happy to listen to what I told them. I've also had bad management that I gave good advice to that would have significantly helped their business. They could not be bothered to listen, and in any case I voted with my feet and left them to figure it out themselves. Both of these were minimum wage or less than minimum wage positions.
Severs generally make well above minimum wage in tips and have little reason to ask for a minimum wage which they already get. They are more apt to complain or quit if the tips cease coming in because of a stupid credit card charge since those tips are what give them over minimum wage.

[1995hoo]

The garage out the road, where I have my car serviced, tacks an additional 3 percent onto the bill if you pay with a card.

So, too, does pretty much any government office in the Commonwealth of Kentucky.

That seems pretty standard for most government agencies. It makes sense insofar as there may be a fee set by law, or an amount of taxes they're entitled to collect. They're not going to give a card processor a cut of that (and they might not legally be able to do so if the law requires them to collect a certain amount).

[SectorZ]

Since it's being brought up in a few responses, in Massachusetts it's still against the law to charge a credit card surcharge. You can offer a cash discount from posted price, but not charge extra. Government excepted of course.

That hasn't stopped some businesses from doing it, and outright ignoring me calling them out on it. Curious what the penalty is for not obeying it. Knowing this state, probably worse than if they struck a gun up and just outright stole it from me.

[SP Cook]

So, too, does pretty much any government office in the Commonwealth of Kentucky.

Most states do this.  Lets take the DMV.  Around here I can go to the Sheriff's office, which charges $3; or I can go to the DMV Kiosk at Kroger, which charges $3; or I can do it in the mail, which costs me a stamp (60c) plus the incidental cost of checks and envelopes, etc.; or I can spend ALL DAY at the DMV. 

Just raise the price $3.

[hotdogPi]

I strongly oppose raising the price for everyone in place of a credit card fee. The business doesn't have to pay this fee for cash users, and the fee is much lower (a flat amount rather than a percentage) for debit users for large purchases. Raising the price for everyone would effectively force these users to pay the credit card fee.

[kalvado]

I strongly oppose raising the price for everyone in place of a credit card fee. The business doesn't have to pay this fee for cash users, and the fee is much lower (a flat amount rather than a percentage) for debit users for large purchases. Raising the price for everyone would effectively force these users to pay the credit card fee.

Stop accepting credit cards then...
And no, handling cash isn't exactly free as well