Restaurants Charging Fees For Credit Cards?

David Lay · Post by **David Lay** » Thu Jul 24, 2008 8:20 am

http://tinyurl.com/5twjba

Does anyone know of any restaurants that are doing this?

Missy Limkemann · Post by **Missy Limkemann** » Thu Jul 24, 2008 9:06 am

I read about this and I was shocked. I almost could see it happening but just didnt realize that they would do it. Almost makes me want to leave a cash tip and tell the waitress here is the extra 50 cents for the charge. I dont know any restaurants that are doing it though.

Jim DeVito · Post by **Jim DeVito** » Thu Jul 24, 2008 9:08 am

Do we have an opinion for business charging a small fee for the use of credit. I know a lot of smaller stores that do this. I have heard it is against the law but not sure. Perhaps I will do some googling later.

David Lay · Post by **David Lay** » Thu Jul 24, 2008 9:11 am

It is against most, if not all, credit card issuers' merchant agreements to require a minimum purchase or charge a fee to use a credit card.

http://tinyurl.com/yy5b42

Shawn Juris · Post by **Shawn Juris** » Thu Jul 24, 2008 9:30 am

Hmmm, I could agree that taking it from the tips would be the wrong way to go. On the other hand though, knowing that there is a processing fee for credit card charges, I suppose as a consumer my assumption is that the owner builds this expense into their overhead and thereby sets the prices based on this. From the perspective of the consumer would it be better that the restaraunt raise the prices on all the meals and spread the cost or that they assess a fee for just the customers who use a credit card?
I'm not real up on the merchant's agreements for use of credit card machines but it seems to make sense to me that if a business is going to accept a credit card on a $5 purchase and then have to pay an substantial portion of that to the processing center, then as a merchant I would set a limit for a minumum purchase. Is the base of the argument that consumer's now have a "right" to charge with their card? Don't the merchant's have the freedom to set policies as it relates to their bottom line (with the exception of discriminatory practices)?

James Mullen · Post by **James Mullen** » Thu Jul 24, 2008 9:42 am

This is a dicey situation. We have a sign posted at the bar that reads "there is a $10.00 minimum on all Credit Cards" this being said we do not enforce our rule because legally we can't. We put the sign up in hopes that customers would see this and if they plan to spend less that $10.00 with thier tip that they will pay in cash, it doesnt always work out for us. Not only is there a clause in your agreement about min. and charges per swipe, but I believe in the state of Ohio you are not allowed to have a minimum transaction clause, at least that is what I have been told by our processor.

The fact of the matter is the cost of doing business has increased significantly over the last 18 months. Small Business owners are looking for any possible way to offset costs with out significantly raising prices. It is a double edge sword. If you raise prices you may lose customers if you charge .25/.50 cents per credit card transaction you may rub customers the wrong way and lose them that way as well. The only point I think of in support of the charge is this is the same thing banks went through many years ago with the MAC machine and the foreign ATM. Originally there was no fee, once people began using and processing more the cost rose and banks started charging a fee to withdrawl money.

Jim DeVito · Post by **Jim DeVito** » Thu Jul 24, 2008 9:58 am

James, Valid points. Luckily I never spen less than 10 dollars when I go to the bar so it never seems to be a point of contention with me.

It is however a little unnerving when the corner store charges .45c to use the debit card. Until I moved I still shopped at that store because I like the proprietor and understood where he was coming form. I just tried to use more cash

David Lay · Post by **David Lay** » Thu Jul 24, 2008 10:01 am

Beverage Square stopped accepting credit cards for a while because someone reported them for requiring a minimum $10 purchase.

Brian Pedaci · Post by **Brian Pedaci** » Thu Jul 24, 2008 11:30 am

Nonsense. Credit card interchange fees are part of the cost of doing business. Those costs should be reflected in the price of the product, like every other operating cost.

Bryan Schwegler · Post by **Bryan Schwegler** » Thu Jul 24, 2008 12:39 pm

Brian Pedaci wrote:Nonsense. Credit card interchange fees are part of the cost of doing business. Those costs should be reflected in the price of the product, like every other operating cost.

Agreed. Merchants take credit cards knowing the costs associated. That cost is no different than any other cost they incur. It's up to them to price appropriately and decide whether the cost is worth the benefit to them.

No one's forcing a business to take credit cards, it's their choice. But if they choose to, they need to follow the rules they agreed to.

Phil Florian · Post by **Phil Florian** » Thu Jul 24, 2008 1:08 pm

I thought I heard the opposite was happening at gas stations. The charge-per-use is nothing new. But what I saw somewhere is some gas stations giving you a break on your gas purchase if you pay in cash. This would make more sense. You are paying a set fee that no doubt includes what you need to cover your expenses that in addition to rent, power, water, etc. also includes transaction fees. I would assume there is nothing there that would stop a person from charging LESS for a service if they use cash, right?

Richard Cole · Post by **Richard Cole** » Thu Jul 24, 2008 1:49 pm

The way I read the linked article, is that some restaurants - Yours Truely being named, are not giving the Server the full amount of the Tip that is charged to the credit card; it sounded like the justification being that it costs the restaurant x% to get the total charge, and they feel that the server should bear the x% cost of the Tip portion of the total charge.

Solution - leave a cash tip.

Bryan Schwegler · Post by **Bryan Schwegler** » Thu Jul 24, 2008 1:55 pm

Phil Florian wrote:I would assume there is nothing there that would stop a person from charging LESS for a service if they use cash, right?

That is correct. The credit card agreements are very strange things. For Visa and Mastercard, it is against the rules to charge extra or surcharge for use of the card. However you are able to give a discount for using cash as long as it's worded correctly. It's basically the same effect either way, but you know how lawyers are and all

American Express is a little different. Their agreement doesn't stop you from surcharging or giving a fee to customer's using the card, but, you can't treat their card differently than any other payment card. Hence, by default, it's basically the same rules as MC/Visa (unless of course you only take Amex).

I'm not sure what the rules on Discover are.

sharon kinsella · Post by **sharon kinsella** » Thu Jul 24, 2008 4:06 pm

Cash tips from now on.

Not only do servers get screwed out of a minimum wage, in many places they have to share tips with busboys and bartenders.

But paying the credit card fees. That doesn't even sound legal.

David Lay · Post by **David Lay** » Wed Jul 30, 2008 2:39 pm

Just in from The Consumerist:

More on minimum purchases