Credit Card surcharge coming to NJ?

[NJDrew1 0]

Regardless of the law,, if you read the fine print of the merchant services agreements from Visa, MasterCard and Discover for those of us who accept credit cards, they all prohibit surcharges for credit card use, cash discounts (except fuel) for cash instead of credit, and minimum purchases (they only act on this one if someone reports it). They can, and sometimes do, suspend the merchant's account for violations.

[quikz 34]

Lawsuits on their way prolly.....

 

Stay Tuned.

 

[halbautomatisch 60]

I got rid of my card machine 2 years ago fees went through the roof, so i did not have a card machine for a year and a half worked ok with out it.

this year i picked up the square paid 2.75% no monthly fees. Their is a charge for not swiping but the square worked good for me on the road and 98% of my customers pay by check in the mail which i want to change had a few who did not pay for services lat year. now i am going to ask for a credit card before work is performed to secure payment but still give the option to pay by check we will just hold the card # for 30 days if payment is not rendered the card will be charged.

I do this for my recurring maintenance accounts, I keep a CC on file, they can either pay with it or it's held as security if they don't pay their bill.

 

 

As far as my retail store, in most cases I don't expect to be charging extra to use a CC anytime soon (if ever), the environment to do so is not there.

[halbautomatisch 60]

Regardless of the law,, if you read the fine print of the merchant services agreements from Visa, MasterCard and Discover for those of us who accept credit cards, they all prohibit surcharges for credit card use, cash discounts (except fuel) for cash instead of credit, and minimum purchases (they only act on this one if someone reports it). They can, and sometimes do, suspend the merchant's account for violations.

This ruling now prohibits the banks from enforcing those provisions in their contracts. If they try to they will now have an issue with the government banking regulators.

[Candide 0]

Regardless of the law,, if you read the fine print of the merchant services agreements from Visa, MasterCard and Discover for those of us who accept credit cards, they all prohibit surcharges for credit card use, cash discounts (except fuel) for cash instead of credit, and minimum purchases (they only act on this one if someone reports it). They can, and sometimes do, suspend the merchant's account for violations.

 

 

They used to have the no minimum thing but it was done away with.

[Red Solo Cup 11]

Surcharge for credit , discount for cash , it's the same thing people.

If there is no "surcharge" posted then it means everyone is paying the surcharge. GET IT?

Gas grass or ass nobody rides for free.

[Smokin .50 1,907]

Surcharge for credit , discount for cash , it's the same thing people.

If there is no "surcharge" posted then it means everyone is paying the surcharge. GET IT?

Gas grass or ass nobody rides for free.

 

Eloquent as always, lol!

 

This "extra surcharge" has been being paid by the public for years--it's only the MSM that's trying to make a big story out of thin air!

 

All this new law really means is that consumers will have the ability to save money by paying in cold, hard, CASH, just like the "old days", lol! CASH IS KING!

[Holeshot 3]

As a small business owner, I became part of the class-action law suit against Visa and MC. I didn't have a choice in the matter! The cost of goods has always reflected the total cost of doing business, including being forced to accept cc's and paying sometimes more than 4.5% on a phone transaction where I can't physically swipe the card through a card "reader". At the end of the month, this isn't pocket change, and it means I have to keep prices high enough to pay these outrageous fees, cover all of the rest of my overhead, insurances, payroll, etc., etc. and still be taxed yet again on the profits as well as my salary. I can't believe that there are people walking around that think that they're not actually paying for the privilege of using their credit cards, earning travel miles, etc., ON MY BACK! They must be stupid or something??

 

The car repair facility I use offers a 5% incentive discount to pay with cash. If you want to pay by CC, just pay the bill, because it doesn't change. BUT, if you want to SAVE MONEY, go to the bank and withdraw some green dead presidents and enjoy the discount. This is the way most small businessmen will handle the issue.

 

And to all here that scream, "I won't pay a surcharge"---you're all Schmucks if you think that you don't already, lol!

 

Walk a mile in my shoes before you tell me how to run my business, PLEASE!

 

Wow Dave, I never thought I would post that I agree with you but here it is;

 

"I AGREE WITH DAVE!"

 

His post is right on the money! no pun intended.

 

The first thing I tell someone when they pull out their AMEX is that we don't accept that card.

 

They always say "But that card gives me my best rewards" I say "Sure but WE have to pay for your rewards, no thanks"

 

We accept a max payment of $500.00 by CC.

 

People don't even know what cash is today, I tell someone a cash "greenbacks" price and they walk in with a check!

 

I recently talked with a small business owner I know, and his CC charges were $65,000 last year!

 

OK rant off, I must be getting old and grumpy before my time.

[67gtonut 847]

We just discussed this today at my shop.

 

Not gonna "surcharge" the customer..... But we will be pushing the 5% discount for cash much harder now....

[Zell959 40]

I see this working out most in favor of online retailers that don't have a cash vs CC component to balance in the first place, and can price products below even the cash price of brick & motar sellers.

[Smokin .50 1,907]

Wow Dave, I never thought I would post that I agree with you but here it is;

 

"I AGREE WITH DAVE!"

 

His post is right on the money! no pun intended.

 

The first thing I tell someone when they pull out their AMEX is that we don't accept that card.

 

They always say "But that card gives me my best rewards" I say "Sure but WE have to pay for your rewards, no thanks"

 

We accept a max payment of $500.00 by CC.

 

People don't even know what cash is today, I tell someone a cash "greenbacks" price and they walk in with a check!

 

I recently talked with a small business owner I know, and his CC charges were $65,000 last year!

 

OK rant off, I must be getting old and grumpy before my time.

 

LOL! You'll enjoy this then:

 

I once had a wedding client that gave her daughter and son-in-law their entire Honeymoon with just using cc point$! All of the other wedding vendors were selected, in part, by their willingness to accept AMEX as payment for their entire contracted-for services, including the 7% state sales tax, (which as you're fully aware) we merchants also have to pay the cc merchant fee on. The Dress Shop, Invitations, Caterer, Florist, Engagement Party Formal Wear, Limo, Me (Photographer), Band, even the Post Office for all of the stamps! On a $75K wedding, the points covered the Honeymoon!

 

And don't worry about being RIGHT or grumpy--it suits you just fine!

 

LOL!

 

Dave

[Joeyd6 0]

I recently talked with a small business owner I know, and his CC charges were $65,000 last year!

 

He is either lying to you.......and/or

 

He is not a small business (Pulling in at least $1.6 MILLION in just AMEX charges to pay that much)........and/or

 

He phone calls in every card purchase and gets a ton of charge backs......and/or

 

He is a terrible business guy and chose a low end/high fee gateway service to process his swipes....

 

 

My family owns a "small business" upsate New York and I am very familiar with the credit cards and fees. And any merchant complaining about the fees should not be in business and has a poor business plan, because you should already be charging such in your retail prices. Over 70% of retail is credit card sales. There is rent to pay, electricity, heat, water, insurance, wages, credit card fees, and profit. You figure out what all that averages out to be and you charge such to every purhcase at the same rate. Thats how the prices have been set every eyar since the store opened in the 1940's and it continues today. The business has grown from a shack to 15,000 SQF store and at the end of the day, we have found the Amex vs MC vs. VISA vs. Discover, come in around at a cost to us of

 

American Express operates on a closed loop network. This means that American Express issues credit cards directly to its cardholders, and opens merchant accounts directly for business that accept its cards. American Express discount rates are based on a business's merchant code (MCC). Each MCC has its own rate. So a business pays the Amex month fee of $8 plus the MCC rate on each sale (2.35% to 3.5%) + their processing center rate ($.05 to .50 each transaction). The key is the processing center rate...called a gateway fee...but all that is based on who you select as a vendor, your credit rating and how much business you do.

Example: $1,000 reatil charge

MMC (2.89% on retail = $0.10) = $28.90 + $0.10 = $29.00

Processing fee: $0.50

Total Merchant Fee: $29 or 2.9% of sale

 

But MC and VISA are no better! They are a closed loop. That means you have to go to a processing center, pay their fees and mark-ups and then pay Visa and MC. They nickel and dime you for everything. Different cards carry different rates but you are required to accept all. You also get dinged for all kinds of other charges that are really never disclosed up front and you learn over time. In Readers Digest terms, a vendord pays off the new 6 tier interchange fees (.03 to $1 per transaction PLUS 1.9% to 3% of the sale) + assessment fees (.011% + access fees ~$.03 per trasnactions) + transaction fees ($0.02).

 

Example: $1,000 retail charge

Interchange Fee ($0.10 plus 2%) = $0.10 + $20.00 = $20.10

Assessment fee = $1.10 plus $0.03 = $1.13

Total Merchant Fee: $21.13 or 2.11% of sale

 

Total difference in this example is .79% of the sale. Can it add up..sure! But when you consider those paying with AMEX in my familys store tend to also spend on average, 17% MORE than those with Visa/MC or Discover! They also tedn to be a more repeat customer.

 

 

So a $1000 customer paying with cash gets a $50 discount and my 20% profit margin of $200 is reduced to $150.

 

So a $1000 customer paying with VISA/MC/Discover gets $0 discount and my 20% profit margin of $200 is reduced $21.13 to $178.87.

 

So a $1000 customer paying with Amex is gets $0 discount and my 20% profit margin of $200 is reduced $29 to $171.00.

 

And on average, that AMEX $1,000 customer will spend $1,117 and my 20% profit margin of $222 is reduced $32.79 to $189.21.

 

Cash is my last choice when you run the numbers and are doing the books 100% legal (where you also get to write off those fees you paid as operating expenses and pay less takes.)!

[Smokin .50 1,907]

I'm really glad that the AMEX customer spends more in your store. Unfortunately in my business, that's NOT the case any more--don't get me wrong, it used to be (pre-recession). Lately people have been asking for cash discounts and then PAYING THE BALANCES WITH A CREDIT CARD due to job loss of a spouse. A contract can be for an event more than 6 months > year in advance, and in that time things can change. Not wanting to hurt business, I have to "eat" the difference so I get recommended to their friends. If all I had to do was stock things for folks to walk out the door with life would be a lot simpler over here....

 

I do agree with your math in your example above, and thanks for posting. It will enlighten some here that we small business folk aren't evil-doers out for mega profits. Some businesses don't even make 20%, and that same 20% has to pay for a lot of extra loose ends too.......

 

Take care.

 

Dave

[M4BGRINGO 139]

Dang, 20% would be awesome around here!

[Kingsoverqueens 10]

I can't imagine going back to spending cash. Ugh.

 

We run everything through discover...I mean everything. It's just so easy to track purchases online and with excel and then catagorize them in Quickbooks.

 

I can go weeks without using hard currency.

[rightisright 3]

I see this as an entirely good thing. CC surcharges were previously a hidden cost that retailers had to eat and I suspect the banks and card issuers acted as a cartel to keep the fees high. Was the service that they offered worth effectively a 2-3% tax on nearly every sale in the US?

 

I wish I could have been a fly on the wall when Visa's lobbyists and lawyers were fighting this...

 

Absolutely. As others have said, consumers NOT using credit cards are still paying the extra processing costs incurred by a business. I, too see this as a good thing.

 

I have been out of high school for a while. Have they stopped teaching basic economics?

[RUTGERS95 890]

you can thank the dems for this and their bailouts of those that are not responsible with their CCs

[deerpark 83]

I'm against over-regulation but this will just serve as another incentive to shop in Delaware (if youre close enough) or to pay with cash. Banks already get enough fees.

[TheWombat 67]

http://www.northjersey.com/news/188754091_Credit_card__surcharge__warnings_called_propaganda.html?page=all

 

North Jersey.com article suggests many retailers won't charge.

 

TheWombat

[Holeshot 3]

He is either lying to you.......and/or

He is not a small business

 

The business I and he are in are not retail stores, so I probably should not have posted in this thread and confused the CC issue.

 

For a retail store given the EXACT perimeters you are talking about, sure everything sounds good. Retail stores HAVE to accept CC to survive.

 

But since you called my example out - He is third generation in his business. I believe the business started in the earIy 1940's but I would have to check to be sure.

 

I think he has a handle on things, but thanks for your concern. Lol

 

I believe he has a total of six employees, again I will have to check to be sure.

 

Just curious, What is the employee limit and total gross profit allowed to be called a small business joeyd?

[rightisright 3]

Just curious, What is the employee limit and total gross profit allowed to be called a small business joeyd?

 

If the Democrats had their way, the answers would be 100 and $40,000

[Holeshot 3]

LOL! You'll enjoy this then:

 

I once had a wedding client that gave her daughter and son-in-law their entire Honeymoon with just using cc point$! All of the other wedding vendors were selected, in part, by their willingness to accept AMEX as payment for their entire contracted-for services, including the 7% state sales tax, (which as you're fully aware) we merchants also have to pay the cc merchant fee on. The Dress Shop, Invitations, Caterer, Florist, Engagement Party Formal Wear, Limo, Me (Photographer), Band, even the Post Office for all of the stamps! On a $75K wedding, the points covered the Honeymoon!

 

And don't worry about being RIGHT or grumpy--it suits you just fine!

 

LOL!

 

Dave

 

Wow, That is incredible!

 

I am way too young to be grumpy! Lol

[mikelets456 78]

It's 40 states that are doing this as part of a class action lawsuit. Hey it's their business and they can do what they. But so can I.

 

http://www.ibtimes.com/new-credit-card-transaction-fees-list-states-charging-4-surcharge-checkout-fee-1042384

[Vlad G 345]

CC companies need the fees to cover costs, and to be profitable

 

You lost me there, sorry. The CC companies are banks, and they charge pretty serious interest rates. They don't need the fees, they want the fees. Those are very different things. The fees went up in recent years because of the credit card legislation passed a couple of years ago making it harder for them to be predatory about their behavior. Faced with LESS profits, they decided to jack up fees all over the place to make up the difference.

 

The answer is the same it has always been. If you can, don't use a credit card.

[raz-0 1,259]

NONE of the issues with ccs are new. There is no new fee. There has been a retail lobby to make cc use more amenable to them, and a card company lobby to make them more profitable.

 

The ONLY reason you are seeing changes is because ccs were impacting money creation so severely. The banks were having issues maintaining reserves, so they eased up. The merchants were having issues maintaining margins and profit, so they stepped up pressure. The government likes to believe you can control the economy with a single dial, and they wanted one less hand on that dial. Then they dressed it up as consumer protection.

 

The only thing this potentially changes is some signage and the opportunity for large retailers to screw the consumer. Big chains like Wal mart negotiate flat fee swipe fees on the order of a few cents. They can isolate cc customers and hit them with 4%. Or you can use your Walmart brand cc to pay at the company store. Heck, they could run Walmart bank and have your pay check direct deposited right to them.

 

 

 

[Vlad G 345]

Heck, they could run Walmart bank and have your pay check direct deposited right to them.

 

They already are a bank and they already do that : http://www.walmart.com/cp/Check-Cashing/632047

[Red Solo Cup 11]

Anyone who claims to be a merchant but doesn't b---h about the amount of receivables they are required to hold in a collateral account against bad charges is IMHO sh--ting you.

Kind of like asking an ebay seller how they like accepting paypal.

Merchants pass along not only the interchange fees to customers, they also implicitly pass along the costs of fraud.

Of course cash has its own problems, as do checks.

But I suspect that losses due to credit cards >> losses due to checks >> losses due to cash.

[Zell959 40]

The answer is the same it has always been. If you can, don't use a credit card.

 

More specifically, maintain a few active credit cards & use them just enough to avoid closure from inactivity, but keep standing balances & dependency on them at very low levels

 

Not having any credit cards at all = Not building up your credit history

[Joeyd6 0]

Just curious, What is the employee limit and total gross profit allowed to be called a small business joeyd?

 

It depends on the "field" (retail, service, construction, etc...).

[Vlad G 345]

Not having any credit cards at all = Not building up your credit history

 

Thats not technically true, home/auto/school loans work just fine.