Want to pay with Debt? That will cost you extra!

[myrdale]

This past weekend while traveling, I stopped to eat at a mexican restaurant.

Previously, the service had been so, so to nearly bad, but the food was good so I thought I'd give them another shot. The food was still good and the service was meh. But then the bill came.

I handed the waiter my debt card, and a few minutes later he came back with my check. $17 for food, $1.50 for tax, and $0.65 for "CC fee" (note I don't have my receipt on me, those numbers are from memory).

Anyway I asked what the "CC fee" was and they said that was what they charge for running a debt card and if I didn't want to pay it I'd have to pay with cash.

Visa's literature is kind of confusing on if this is allowable or not. They do have a site for reporting such activity, thought I don't know if it will make any difference, and I haven't spoken with my bank yet.

It's "only $0.65" but that could easily be $1,000 more the restaurant is taking in every week and no one ever notices, especially considering it was added after the fact.

And if you fall into the crowd of it's "only $0.65", well what if it was $10 or $1,000?

[ua_guy]

Credit card surcharge fees have been around forever, but it wasn't until 2013 when a class action suit determined they are legal, and it seems to be up to an individual state whether they are allowed or not. Sounds like cc surcharges are legal in your state.

Pay in cash if you'd prefer to avoid the fee. A card transaction is a convenience the business provides at their expense unless they charge you for it, then it's at your expense. Processing fees vary by card and processor, with AMEX having some of the highest. Typically in the 2-4% range, but that also depends on volume of transactions. A family Mexican food restaurant is not likely to be high volume so they probably pay higher fees than say, McDonalds does.

But, it would seem to make more sense for the restaurant to just raise its prices to cover its costs than irritate customers with an additional fee. Like what if they charged for each napkin used? Irritating. But also, itemizing it as a separate fee provides an incentives for those who prefer to pay in cash.

2-4% is normal for a surcharge.

Not gonna pay $10 to use a credit card for a $20 transaction. I've also never seen it that high. But, what if they are bringing in an extra $1,000 per month through those fees? Most of it would be appearing to go right out the door to their processor based on the fee you paid.

[disneysteve]

Credit card fees have become increasingly common, which is really annoying. We talked about this in this thread: https://www.savingadvice.com/forums/...cost-you-extra.

It's bothersome and really doesn't even make sense because accepting credit doesn't really cost the business anything extra and statistically increases sales. Discouraging card usage is counterproductive for them.

What do I do? More and more I find myself paying cash to avoid the 3% surcharge. I hate it but if the CC reward is only 1% I'm still losing out after the fee.

[kork13]

Yeah, I generally calculate the % cost, and compare it to the rewards I get (generally 2-3%, depending on spend category) ... 65 cents on a $18.50 bill (3.5%)? I'd pay cash. 65 cents on a $40 restaurant bill (1.6%)? My CC gives me 3% back at restaurants, so I'd use my card & come out slightly ahead.

This is why I rarely run around with at least ~$40 cash on me, so that I can cover small expenses that don't accept card, or it's more costly to use the card.