Is this legal?

[Confetti]

This isn't a fly-by-night operation. They have a website with stock and some prices listed, they've been operating for about 20 years, and it's a BIG business. We've sold several junk cars to them and they give us a check, not cash. I do, however, believe it's exactly the case that they aren't reporting some of the cash transactions.

I'm off to find a link on the Visa site to report them.

[simpleyme]

well good maybe you can bring there little scheme to the ground and put them out of business

[disneysteve]

well good maybe you can bring there little scheme to the ground and put them out of business

So what exactly is your position here. If this business is operating on a cash basis and evading taxes in the process, do you think that's an okay thing to do? We don't know that, of course, but it is kind of suspicious for them to charge $25 for cash and $37 for credit for the same item.

Personally, to be honest, I wouldn't turn them in. I'd pay the cash price and be glad I got a bargain. But the original question was "is it legal?" and the answer to that is no, it isn't legal for a business to set different prices like that, especially if they aren't reporting the cash transactions for tax purposes.

[simpleyme]

my position is you should not do business with people who you think are crooked, but seriously to report people to the IRS call visa and all that jazz seems ridiculous ,why not just take the item back and get a refund

ask the business for an explanation, I am assuming(?) OP really wants the difference between the two prices and has no real concern about the overall ethics of the company ask for the difference to be refunded


OP should go buy something with cash and see if they get a receipt ,if no receipt that likely means they are not reporting that income and if you are so inclined ,take it upon yourself to make them pay

edited to add; by the way I too am not for businesses not reporting and not paying tax

[mom-from-missouri]

In Missouri what they did is legal. In fact, we see a lot of it around here where there are small towns. Banks here charge the merchant if the credit card sales are below a certain amount, plus the rent on the machine, and there is a 7% transaction fee.
So, for the small business owner, he has to do this or go in the hole-or just not take visa at all.

[disneysteve]

my position is you should not do business with people who you think are crooked, but seriously to report people to the IRS call visa and all that jazz seems ridiculous

That's fair. Can't argue with you there. Although I seem to recall there being some type of reward for turning in tax evaders, so one might have some financial incentive to report these folks.

[disneysteve]

In Missouri what they did is legal. In fact, we see a lot of it around here where there are small towns. Banks here charge the merchant if the credit card sales are below a certain amount, plus the rent on the machine, and there is a 7% transaction fee.
So, for the small business owner, he has to do this or go in the hole-or just not take visa at all.

Are you sure it is legal, or is it just common practice? Businesses are allowed to give a reasonable cash discount to compensate for the fees associated with processing credit cards, but 32% is way beyond what would be considered reasonable.

[InDebtInDC]

The only people who can determine if something is legal or not is the courts. The courts ultimately decide what is "legal" or not.

To really know if the sale was legal or not requires a ruling from a court with jurisdiction, or at least a(n) (in)formal opinion issued by a government agency.

Generally businesses tend to offer discounts for cash sales. Whether it violates the cardholder policy or not depends on the agreement they have with the issuer.

The only people who can determine if something is legal or not is the courts. The courts ultimately decide what is "legal" or not.

It's interesting that you say this. It goes to show how much power our judicial system has gained since the Constitution was written.

The legislative branch is the one that really should determine what is legal or not. Obviously that's not the case anymore. Just about any court case can go either way nowadays, depending on the judge's whims.

[InDebtInDC]

It's interesting that you say this. It goes to show how much power our judicial system has gained since the Constitution was written.

The legislative branch is the one that really should determine what is legal or not. Obviously that's not the case anymore. Just about any court case can go either way nowadays, depending on the judge's whims.

Agreed. The legislators may make laws, but ultimately it's lawyers and judges who massage the fact patterns to fit the laws.

It's not their fault really. You can't think of every situation ahead of time.

[gackle]

The only people who can determine if something is legal or not is the courts. The courts ultimately decide what is "legal" or not.

While I'm not disputing your point, I think it's irrelevant in this discussion. Some laws are more black and white than others, i.e. speed laws vs. tax laws. If someone was doing 70 in a 55 I don't think we'd need the opinion of a judge to safely agree that it was illegal.

From what I perceive, the points of debate are 1) is it against the Visa user agreement with businesses to charge more for Visa purchases vs. cash, and 2) is the junk yard selling items for cash and not paying Uncle Sam its due taxes on the items?

1)From the Visa website:

Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge you a fee when you want to use your Visa card.

2)No one disputes that it's against the law to not report income/pay income taxes to the government. I have to agree with Steve - while we can't prove in this forum that the junk yard is not paying taxes, the extreme difference in credit vs. cash price is definitely an incentive to pay in cash. I also think everybody agrees that cash payments are a common way for people to avoid paying taxes because it's hard to trace.

[InDebtInDC]

While I'm not disputing your point, I think it's irrelevant in this discussion. Some laws are more black and white than others, i.e. speed laws vs. tax laws. If someone was doing 70 in a 55 I don't think we'd need the opinion of a judge to safely agree that it was illegal.

From what I perceive, the points of debate are 1) is it against the Visa user agreement with businesses to charge more for Visa purchases vs. cash, and 2) is the junk yard selling items for cash and not paying Uncle Sam its due taxes on the items?

1)From the Visa website:

2)No one disputes that it's against the law to not report income/pay income taxes to the government. I have to agree with Steve - while we can't prove in this forum that the junk yard is not paying taxes, the extreme difference in credit vs. cash price is definitely an incentive to pay in cash. I also think everybody agrees that cash payments are a common way for people to avoid paying taxes because it's hard to trace.

With all due respect, may I ask what your background is with respect to the law?

[FrugalFish]

JMHO, but in my past experiences with junkyards, it seems like they see someone who shows up with cash as having a limited commodity, whereas the person who pulls out their checkbook or Visa has brought a reserve along. They see a checkbook or Visa as someone who can afford a higher price. We had one friend who never got a deal at the junkyard because he always whipped out a checkbook. DH does much better pulling out a small wad of cash- I think they realize that someone with cash is more likely to start leaving things behind and then what are they going to do with misc. parts that are left behind?

I don't think it's right for them to do that, but I think it is common practice, especially if you are up front with them about how you intend to pay.

I don't know if I'd go reporting them to everyone and their brother, but if it is really bothering you, then what's the big deal of calling and running it by Visa to see what they think? OTOH, if you really think they are evading taxes, there COULD be a nice little reward in it for you...

[gackle]

With all due respect, may I ask what your background is with respect to the law?

I just obey it. I have no formal education with regard to law.

[simpleyme]

Frugal fish - you might be right about the limited commodity, just this morning I had a customer pay with cash his order was 10.09 but he only had 10 but i let him go with all his stuff ,I would never consider that for a cc user but of course I would not have too ;-) since their resources are unlimited

on a related note- I only use cash, but I do carry a credit and a debit card just in case so I would think that people who are the opposite of me and refuse to use cash should always carry about 50 bucks, at the very least 20 just in case