Credit Card Bitch

Post by **PeteC** » Thu Jun 21, 2007 8:24 pm

Catchy title, na?...LOL. Do we have anyone out there who works for VISA, MC or AMEX that can give all of us some sound advice?

Small shops here that sell appliances, clothes, furniture and some restaurants insist to charge an extra 3% for the "privilage" of allowing people to use their credit cards in their establishments. Most hotels and professional establishments do not.

First off, my understanding is that the VISA and MC admin charge to the vendors is 1 or 1.5% and only AMEX is 3%. So...we get double ripped if using VISA or MC.

Second, it is also my understanding that this is 100% against the terms and conditions they agreed to when issued a license to accept these credit cards. Further, their privilage to accept these cards can be revoked immediately if this "vendor surcharge" is reported to the credit card companies.

Am I right or worng, and further details appreciated so I can go on a rampage the next time a place attempts it with me. Thanks. Pete

Post by **Guess** » Thu Jun 21, 2007 10:47 pm

Pete,

I course I do not know but I have worked for Amex, Visa and MaterCard in the past so I know there polices regarding acquisition of funds.

There is no fixed rate but as you stated Amex charge more for many reasons.

Every company gets its own deal. The small man will usually rely on his banker or financial adviser to get the best deal. I have heard that that Amex in the UK have asked as much as 7% from the merchant to acquire the cards. They have all reduce charges over the last decade in the face of competition and in a move to get all merchants in their system and dispense with cash altogether. In banking Thailand is about 20 years behind Europe and even more behind the US.

I couple of points to make that are relevant, at least in the west, are:

The acquisition of cards in the point of sale is something the business must consider. The big company were in first and gradually as charges have been reduced more and more smaller companies have got embroiled. Amex is still targeted at the business traveler so will usually only be taken by businesses that have or expect to have business trade. The 5 or 6% then becomes of little importance. Amex offer many free services to the companies to issue or guarantee Amex cards for their employees

In many counties it is illegal for an outlet to charge the customer the charge and a cash or check (cheque in the UK) customer should pay the same as a card customer.

You are right. If any outlet charges the customer more than the rate charged to them and the acquiring bank find out they will be in breach of contract and the facilities will be removed post haste. In the UK this usually involves a couple of large "technicians" tolled up with a screwdriver and a pair of side cutters with a policeman standing behind watching.

If you used a restaurant that was not part of a chain and in a country where is legal to charge the customer the 3% is about par.

Having said that though IMHO any outlet that charges has is marketing head ups its arse. The taking of credit cards means lower banking charges, less chance of robbery and theft and if they do things properly they are covered by the bank against fraud. Something they don't get with a check and they lessen the risk of taking forged currency. By taking credit cards they expand their market place quite considerably.

If you think they are fiddling you report them to your issuing bank. If it is a US or UK card you could get a reward.

PS keep the payment slip and write down the details before the ink fades. It will have the acquiring POS number on it.

Post by **chelsea** » Fri Jun 22, 2007 8:30 am

Pete I am pretty sure here in Australia vendors have the right to recoup the extra 3% charge as long as it is advertsised that they do so.
Also here we get slugged 10% public holiday/weekend service surcharge in most resturants and cafes.
Is is said that is to do with the extra wages that people have to be paid at weekends/public holidays to work.

ozuncle · Post by **ozuncle** » Fri Jun 22, 2007 11:09 am

Chelsea,

Point one is correct. (and you must not charge the customer more than you are charged by the Credit Card company.) If you do not comply they will cancel your facility.

The second is not true for all restaurants.

The reason they charge the extra loading is because of penalty rates for Sunday and Public Hols. However most staff these days are on Workplace Agreements so they dont pay extra anyway. Just another ripoff.

Post by **chelsea** » Fri Jun 22, 2007 11:51 am

Ozuncle, was not sure on the weekend/public holiday surcharge in relation to workplace agreements.
I read an article in the Perth paper regarding a night out for a party at the C Resteraunt in the City.
Was a party of 10 or 12 at the weekend, and part of their bill totaled over $100 in surcharges.
I think they charge 15% for the weekend/public holiday surcharge, plus the credit card surcharge.
If you look at the menu it is all printed on the last page, but who ever reads it. Needless to say these people will never return again
I am also sure if you buy concert tickets online now through BOCS they also charge the 3%.
By the way, I remember sometime ago u say that you have a resteraunt in Perth. Where abouts is it.

Post by **Guess** » Fri Jun 22, 2007 12:11 pm

ozuncle wrote: The second is not true for all restaurants.

In the UK it was illegal to charge the customer for Credit Charges for a at least ten years. When the rates came down and the law was change to allow it it was found that the vast majority of merchants decide not to charge. They had by then realize the charge was offset by the increasing charges and risks of dealing with cash. With modern computer systems there is now a benefit in the reduction of admin with the POS machine being able to send data to the admin system. Not so easy with Cash.

As regards Chelsea's statement about holidays it could be the same and also I believe (correct me if I am wrong Chelsea) but things like this in Oz are dictated by State or Territory Law as in the US. I.e Perth & Sydney may not be alike.

Post by **chelsea** » Fri Jun 22, 2007 1:10 pm

Guess some things are governed by state laws and then some by federal. In relation to credit card charges I am sure is under federal as the 3% is allowed Australia Wide

ozuncle · Post by **ozuncle** » Fri Jun 22, 2007 2:35 pm

chelsea,
I did PM you sometime ago. We are in Mt. Hawthorn.

The whole restaurant scene in Perth is a story in itself.

C Restaurant has to charge top dollar for everything.
1. Wages are so high.
2. Can you imagine their rent?
3. They are in the Entertainment Book which offers big discounts to book holders.

On the other hand they are competing with numerous Mainly Asian restaurants that pay their staff cash. No tax, No super and in a lot of cases I have heard of $8 to $10 per hour.

We are not in the big league and have a small loyal staff who get paid well.

Small print on the back page is a bit annoying.
I know the Credit Card Companies made it very clear to me that if I charged the surcharge, it was illegal If the customer was not aware of it BEFORE the purchase.
We get charged about 3 % for Amex and Diners but only about 1% for others.

ozuncle · Post by **ozuncle** » Fri Jun 22, 2007 2:38 pm

Many Industries in Aus pass on the surcharge legally.
Especially low margin items.
Travel agents for one.