Do businesses charge extra for using a credit card in your area?

[Landy828]

Had one do this to me in a small town we visited this weekend. It was a nice restaurant a friend suggested. Never seen it before in a restaurant like that.

Instantly realized it as the bill they brought me was $67, but when they brought my debit card and receipt to sign, the total was $70. Had a $3 "card charge" added without any warning or notice.

Was a first for me in that setting.

 

[OrangeNova]

Very few, but it happens.

I can't think of the last time it happened though

 

[TheAggroCraig]

The only time I've come across a CC fee is with state/town payments, like my town's electric charges like 3%-5% extra if you pay by credit card, but if you pay with your bank account. My cell phone bill takes $10 off the top by linking to my bank account as well.

But yeah, local businesses I haven't seen it on anything yet.

 

[Hollywood Duo]

it's always been a thing with a lot of small businesses

 

[Davidion]

I live in Queens and rarely see this, though I do remember a couple here and there.

I frequent a LOT of restaurants, and what many of them do is the exact inverse of what OP describes; they actually offer a small discount, typically ~3%, if you use cash.

 

[BennyWhatever]

I have family that owns a Gaming store (mostly Board/Card games). They just recently had their CC fees get jacked up tremendously, so they had to start charging for CC purchases below $5. They host a lot of gaming tournaments and sell snacks/drinks, so people would buy a $1 soda with CC and it used to be fine, but with the new CC fees, they don't make any money on that anymore, so they need to charge the fee.

I see the minimums here a lot, but it's very rare to see the CC fee on every purchase at a store.

 

[chuckddd]

Lots of gas stations have dual prices here. Usually 10 cents a gallon more to pay with credit.

I own a small business and I'd rather not pay the cc fees, frankly. I don't change the rate, though. I just charge everyone more.

 

[The Albatross]

Only one place, a local pizza place, they have a small surcharge for credit cards. Used to not be permitted by the CC's, but I don't really care, I still go there. THey might phrase it as a "discount" if you pay cash, I forget. Gas stations frequently have gas $0.10 cheaper if you pay cash.

 

[NickatNite]

Yea pretty common here in Southern California. $0.10 more from gas when using a card is at every station I've been to; and of course plenty of mom and pop small businesses adding a ~ $0.25 fee for card use.

Have noticed less and less small businesses doing it over the years.

 

[PAFenix]

Some places.

 

[HStallion]

Jersey here and its hit or miss. Not sure exactly why some do and some don't as its not like its small mom and pop joints that are charging 3% extra, its usually larger stores or big chains.

 

[Shadybiz]

I'm in NJ. Some do, some don't.

Pro-tip: If you have to have a professional out to your place for say plumbing, electrical work, etc., get a quote from them....and then ask what they'll take if you pay in cash. You might see a discount off of the quoted price, and that discount may outmatch whatever points/rewards you might get for using the credit card. Most of them (at least where I am) are used to people paying by credit card or check, and it's not your problem whether or not they want to report ALL of their income, come tax time.

 

[Jazzy]

I have family that owns a Gaming store (mostly Board/Card games). They just recently had their CC fees get jacked up tremendously, so they had to start charging for CC purchases below $5. They host a lot of gaming tournaments and sell snacks/drinks, so people would buy a $1 soda with CC and it used to be fine, but with the new CC fees, they don't make any money on that anymore, so they need to charge the fee.

I see the minimums here a lot, but it's very rare to see the CC fee on every purchase at a store.

Click to shrink...

Why not go looking for a new processing company? They might give you a substantial discount to switch. These com0anies bank on you not finding it worth the hassle to switch.

 

[lunarworks]

I thought the world has moved on to QR nowadays? I don't bring much cash with me anymore, even small stalls on the streets accept it.

Click to shrink...

Everything in Canada is tap. The payment processors encouraged the switchover. Even small vendors at pop-ups have iOS devices.

 

[Orayn]

They label is as a discount for using cash, but yes, some places I frequent have started. Craft breweries are the main one I've run into so far, 5% increases across the board.

 

[Bear]

I'm so split on this practice because on one hand I love supporting small business and want those that I love to succeed. But on the other hand, I pay a shit load of taxes and businesses, especially those local businesses that make a killing mostly under the table, should too.

 

[BringBackSonics]

Sometimes they do, most times they will charge if like you purchase a 3$ item or less. My guess is the business has a minimum credit card charge

 

[Darknight]

I never understood the "under $10" thing. The item(s) you're purchasing all likely have the same markup, so it's still ~3% processing fee for the merchant regardless of the amount charged (there's no minimum for them or incentive from the processing vendor). It just seems like a skeevy way to charge ppl more for more items they don't need to meet the minimum.

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CC transactions are usually a flat fee plus a percentage. So getting hit with that flat fee on a small charge sucks.

 

[SinOfHeart]

Gas stations have separate cash and credit amounts for gas but that's been the case here forever. Other than that no

Click to shrink...

Yeah, this and small businesses are really the only places I've seen it, and for small businesses I feel like a bunch of them have just had a minimum you need to be above to avoid the charge (like, if you spend over $10 there is no extra charge for using a credit card).

 

[Rampage]

Mom and pop stores and some gas stations. They are good about informing people, so np. I just order over the surcharge limit to avoid the fee.

 

[Sanjuro]

Some do. In addition, many places are also still doing cash only.

 

[Damaniel]

The corner store near me charges a small ($0.30) fee for purchases less than $5, but I almost never see it anywhere else outside of gas stations (where it's still pretty common).

 

[Siyou]

Yes. And in some cases they only have a piece of paper somewhere to explain they do this. Some in my area actually refuse card and you must pay cash. One does have an ATM in the restaurant, but you'll be charged $4 for withdrawal.

 

[Primal Sage]

Nothing's added when using cc in Denmark. At lest I don't think so. Only tourists use credit cards. Everyone else uses a debit card. So easy to use, I just double tap the power button on my phone and then it's a contactless card I can swipe. Works in all stores.

Cash is almost only used by criminals and the elderly here.

 

[balohna]

I used to see this like 10-15 years ago (around when I first started using a CC so noticed it, probably was the case previously as well). In 2024, I don't see it. I will say I don't go to as many mom and pop places as I used to. In about 2017-2018 I lived near a lot of small family-owned restaurants and a majority of them were actually cash only, and if they did take cards there was a minimum and sometimes a fee. Nowadays when I go to restaurants like those ones, they take card and don't charge extra. But I haven't been to those exact same restaurants for a while so I don't know what they do.

This is in Canada, Vancouver area. For locals looking for specifics - I used to live near Crystal Mall in Burnaby and now I live near the Willowbrook area in Langley.

 

[ParanormalFupa]

Yeah, and while they should just change prices to account for it, it's hard to argue when the CC swipe fees and terminals are a total racket and margins are already razor thin.

 

[yyr]

As I'm in the New York area, I routinely see this happening at small businesses (not big ones). I am glad that more merchants are doing this, as it encourages more use of cash.

Using cash, the business or locality you're patronizing gets 100% of the money. Non-cash transactions funnel a small portion to a huge bank that doesn't need the money; we all know that the fees they charge are far higher than the actual cost of handling the transaction. It contributes directly to the problem of income inequality, funneling wealth from the people that need it to the people that don't.

I never understood the "under $10" thing. The item(s) you're purchasing all likely have the same markup, so it's still ~3% processing fee for the merchant regardless of the amount charged (there's no minimum for them or incentive from the processing vendor). It just seems like a skeevy way to charge ppl more for more items they don't need to meet the minimum.

Click to shrink...

The fees that merchants pay for credit card transactions are a fixed fee PLUS a percentage. Like (for example) 35 cents plus 1.9%. I don't know what the exact amounts are.

This is why minimums exist. Because if you only charge a few dollars, and you buy an item where the profit margin is small, the merchant will LOSE money on the transaction.

Credit card companies all say that minimums and fees/"cash discounts" are not allowed, but when so many people these days want to charge small amounts, what are small businesses supposed to do?

 

[Wooden Robot]

I would rather them just not let me know and charge whatever it's going to be, because I'm sure as hell not going to pull out cash to pay for anything.

 

[methane47]

I have a business and for a few months we've been asking a convenience fee to cover the charge as the CC fee is ridiculous for us.
Typically the purchases are for $1000 or more so a %4.2 charge from the processor can get dramatic.
Plus we have to pay a monthly subscription to the bank for the ability to process cards

We initially started doing this for customers outside the country as it was easier for the customer to send the card info rather than going down to the bank to send a wire xfer. We tried to be fair and stipulated that only payments over 2500 would be charged the additional 4% fee.
Then customers started just sending up 2 payments for $1250 each on the day. So then we said ok, will will just ask for 4% for all charges.

Recently the bank sent out a notice to the public indicating that this is against policy... so we have two options, refuse to accept CC payments or increase our prices across the board by the 4%.

4% may not seem like alot but margins are already razor thin. Sooo not sure how we should proceed.

 

[pooptest]

CC transactions are usually a flat fee plus a percentage. So getting hit with that flat fee on a small charge sucks.

Click to shrink...

Ya, likely. I can't find our original paperwork for my work, but I swear we only get charged a trans fee on ACH and only a % on CC's, but I'd have to do some digging.

 

[LoveAndBeer]

Only know of one (local only) place here in town that has a fee for credit card — believe it is the same % as their fee so I get it and don't mind covering it for them. Great Thai place with like 3 owners/operators. Food is amazing and I'd hate to see them close (Covid was touch and go).

Few Gas stations in the area have credit/cash costs, but I don't fill up at those locations.

 

[Netherscourge]

I noticed contractors charging a 3% CC fee on quotes I was getting lately.

I pay by Check for contractor jobs though.

 

[chaostrophy]

The processing fees must be getting exorbitant, as my understanding is that most businesses would rather not deal with cash, because there's labor costs involved in counting it, making change, etc., and it's more vulnerable to being lost or stolen. I've heard cannabis businesses that have to be cash only because their business is still illegal at the federal level struggle with this.

I'd think processing costs would go down with general costs of computing and network capacity going down. Where are all these fees going? Credit card rewards, or are the processing companies an ultra-profitable cartel or something?

 

[TheDestructiveSquirrel]

Occasionally, some places offer a discount if you pay cash but it's few and far between in the Toronto area or at least the places I go

 

[Dr. Zoidberg]

A few local restaurants do this but that's all I've seen.

 

[amon37]

Some places do a minimum charge to offset fees and some places to a 3-4% add on charge to offset. Especially in the more "touristy" areas.

 

[Vapelord]

Example this guy does that $26.50 cash or $29.19 paying with the card. I think its just to pass on the fees or cash is also tax free? I dunno man...

View: https://www.youtube.com/watch?v=47w15kh7Xe4&t=531s

 

[methane47]

Example this guy does that $26.50 cash or $29.19 paying with the card. I think its just to pass on the fees or cash is also tax free? I dunno man...

Click to shrink...

Its passing the CC fees on to the customer but still trying to keep prices low for cash paying customers.

 

[RoaminRonin]

Every single gas station in SoCal charges an extra 10 cents a gallon if you use your debit card.

 

[flyinj]

Yes. And in some cases they only have a piece of paper somewhere to explain they do this. Some in my area actually refuse card and you must pay cash. One does have an ATM in the restaurant, but you'll be charged $4 for withdrawal.

Click to shrink...

Oh yeah this is my favorite. A lot of bars and restaurants in NYC are cash only but they'll happily point you to their ATM that charges between $4 to $10 for a withdrawl. One time I saw one that charged $12. It's kind of unbelievable that these owners can be such cynical assholes directly into the face of their customers.

 

[flyinj]

As I'm in the New York area, I routinely see this happening at small businesses (not big ones). I am glad that more merchants are doing this, as it encourages more use of cash.

Using cash, the business or locality you're patronizing gets 100% of the money. Non-cash transactions funnel a small portion to a huge bank that doesn't need the money; we all know that the fees they charge are far higher than the actual cost of handling the transaction. It contributes directly to the problem of income inequality, funneling wealth from the people that need it to the people that don't.



The fees that merchants pay for credit card transactions are a fixed fee PLUS a percentage. Like (for example) 35 cents plus 1.9%. I don't know what the exact amounts are.

This is why minimums exist. Because if you only charge a few dollars, and you buy an item where the profit margin is small, the merchant will LOSE money on the transaction.

Credit card companies all say that minimums and fees/"cash discounts" are not allowed, but when so many people these days want to charge small amounts, what are small businesses supposed to do?

Click to shrink...

My main issue with cash is that it is a complete pain in the ass for me to get cash without paying $2-4 ATM fees on top of $3 from the bank. My bank shut down the only ATM in my neighborhood about a year ago and I need to take the subway like 40 minutes round trip to my closest bank's ATM. I looked into the other banks in my neighborhood that had ATMs, and they were all terrible.

So it comes down to the merchant forcing me to either pay $5-6 in ATM fees, take a 40 minute subway ride or pay them 10% more than the total so they can save 35 to 50 cents on the CC fee from my transaction and take a little off the top.

 

[Chiaroscuro]

I know this is mostly an US/Canada thread, but to contribute, here in Brazil you can pay everything with CC with no extra, and no minimum ammount (I did several payments of less than half a dollar).

However business here also offers up to 5% discount if you pay with immediate bank transfer (we call it PIX). So… it is sort of the same.

 

[Siyou]

Oh yeah this is my favorite. A lot of bars and restaurants in NYC are cash only but they'll happily point you to their ATM that charges between $4 to $10 for a withdrawl. One time I saw one that charged $12. It's kind of unbelievable that these owners can be such cynical assholes directly into the face of their customers.

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It's even better when you know that whatever you withdraw will be in big enough bills that the person will either get a tip over the amount deserved or next to nothing. This place charges way too much for mediocre breakfast anyways. I never went back.

 

[Torpedo Vegas]

Only the shittiest of shitty gas stations do that.

 

[DJ_Lae]

I don't think I've seen any signs with minimum purchases or surcharges for credit card use in the last decade or two, actually, but maybe I'm just not looking.

I have run into a few places that offer a discount if you don't pay with credit card, but usually that's limited to cash so they can do some tax fudging on their end.

 

[kyorii]

Nope. Seattle area. I've never seen such a thing.
If a place does that, I'm not buying whatever it was I was getting and will never go back.

Click to shrink...

Defintely places in Seattle that do like Pho Bac.

 

[ngower]

Pretty sure it's banned by law in Maine.

 

[StarStorm]

Every gas station in SoCal charge more for cc and 10 cents less for cash. Not sure about other places.

 

[bigzgod]

I'd think processing costs would go down with general costs of computing and network capacity going down. Where are all these fees going? Credit card rewards, or are the processing companies an ultra-profitable cartel or something?

Click to shrink...

Both the credit cards themselves and the processing companies have made quite a bit, though obviously Visa/MC/Amex make the bulk of the money. Processing companies typically use standard Visa/MC/Amex interchange rates plus their own margin, which has been going up quite consistently. For retail credit for base Visa interchange fee (as an example), on Visa Infinite or Signature Preferred cards, that would be 2.3% + $0.10 and 2.1% + $0.10 respectively.

You might see processing companies add in something like an additional 0.4% + $0.10 per transaction or more. Numbers will obviously vary and some may charge a higher percentage or a higher base cost per swipe. They will also potentially require equipment purchase and will also add in additional fees that are charged yearly, like a PCI compliance fee or a base membership annual fee. You might also see the typical junk fees that are hidden like monthly statement fees and what not along with the usual cancellation fees.

As a whole, most processing companies are pretty scummy and will nickel and dime while charging as many hidden fees as possible, some even doing incredibly shady things like charging higher rates than the published Visa/MC/Amex interchange rates (and calling it interchange rates) and then adding their own margin on top.

I will say with regards to the topic though that any small business having a surcharge higher than 4% is likely pocketing the difference, considering that the published rates plus margin for the processing company shouldn't be higher than 4% and not all transactions will be credit or at the highest level of rewards cards plus debit card transactions are charged at a much lower rate (0.05% + $0.21).

 

[Vish]

Is this why Costco only does visa