Why do we tolerate a 3% "credit card" fee?

[timcar86]

Is this the only industry that blatantly rips off it's customers in this fashion? I just don't understand why a business that sells items that are worth hundreds of dollars needs to have a "cash discount" or a "3% credit card fee" when buying a gun. There's no other place I shop, online or brick-and-mortar, that does this. I realize that there are some gun stores that don't do this but they are few and far between. I guess the worst is shopping online. Why on God's green earth would I send a money order to buy something from a website? If you buy online, you use a credit card. I know someone will chime in and say they pay with a money order when shopping online but you're the exception, not the rule. Someone educate me on the fees that credit card companies charge vendors. And if it's 3%, why not add that to the cost of the gun so people like me don't flip out? Sorry for the rant but I hate seeing the price for a gun with an asterisk next to it with "cash discount price!". Sorry, I don't walk around with 1200$ in cash.

Forgive the rant, had to vent that one out.

[luvmyberetta]

I agree it sucks, but I don't consider it a rip off. It is a legitimate fee that I feel shouldn't be passed on to the buyer, however. Credit card companies do charge the seller a 3% fee on every purchase run through their credit company. If you don't pay with a card you don't have to pay that fee. Vedors don't add that 3% for cash & check customers to save money for the customers that aren't using a card. Also, some vendors don't charge the extra 3% if you're using a debit card, but not all will do that & it depends on what credit company the vedor uses too. My LGS doesn't charge any extra fees, but their prices are already higher than a kite to begin with. All I can say is haggle, haggle, haggle!

[kb4ns]

Or is the firearms industry the only industry that allows cash buyers to receive a discount instead of charging everyone a higher amount that would cover CC fees? I dunno, just thinking aloud. I, too, get tired of "cash discount prices" but we may be looking at it from the pessimist's viewpoint.

[Guest FIST]

I may be wrong but,.....I always understood that a retailer is being charged for using the system that runs the credit card per transaction. I suppose the added percentage is to cover that cost and by offering the cash option they don't have to charge across the board on sales. Larger outfits can obviously absorb the cost compared to most but in this case (I'm 99.9% sure I know who your talking about) I don't know why.

Two responses popped up while I was typing, guess I gotta get quicker.

Edited May 11, 2012 by FIST

[BryanP]

I agree it sucks, but I don't consider it a rip off. It is a legitimate fee that I feel shouldn't be passed on to the buyer, however. Credit card companies do charge the seller a 3% fee on every purchase run through their credit company. If you don't pay with a card you don't have to pay that fee. Vedors don't add that 3% for cash & check customers to save money for the customers that aren't using a card. Also, some vendors don't charge the extra 3% if you're using a debit card, but not all will do that & it depends on what credit company the vedor uses too. My LGS doesn't charge any extra fees, but their prices are already higher than a kite to begin with. All I can say is haggle, haggle, haggle!

All credit card fees are passed on to the buyers (of any item) as part of the price itself. You're fooling yourself if you think otherwise. The reality is that people who pay cash (quite the minority these days) are just paying the 3% built in to the price anyway, they just don't know it. Sellers who offer a cash discount are just being honest about it.

[gregintenn]

That fee dosn't bother me. I can avoid it by paying cash. I get peeved at senior citizens', law enforcement, etc. discounts. I also dislike stores that charge one price, but another price if you have this card, and this price if you're a super duper gold plus member.

[Steelharp]

timcar, wait till someone gives you your first "senior discount" without asking you. I got really mad... then said, "Waitaminit... I just saved my sales tax!" Suddenly, I wasn't so pissed...

[timcar86]

One thing I find odd though is that gun stores only apply the cash discount on firearms. I never see a discount on holsters, ammo, hats, etc. If they're being honest about the 3% fee, why not be honest with every item in the store?

[runco]

I started to post this same topic a few months ago. I definitely go out of my way to avoid retailers who charge this fee. Why don't these same gun dealers charge me an employee fee, retail rent fee, electric fee, etc. what ever happened to the cost of doing business. Even the local flea market vendors do not charge a fee, but it is rampant in the gun industry. The gun retail industry could gain more loyalty if they would listen to its customers. I like box stores that sell guns for this reason. They don't charge extra for my cc.

[PolePosition]

I used to have my own business and I never charged extra for customers that paid with credit card. Now, local customers knew that if they paid me cash, I would make more profit, and the good customers would opt to do that. But I didn't think it was fair to have a different price based on how customers paid me. Some may say this is not smart business practice, but I went into business for the customer, not just for me.

So, I too, dislike when a posted price is a "cash price" and if I want to use my credit card, then I have to pay extra. A business should know that if they want to make up that 3% loss, then just sell more items. I shouldn't have to walk around with hundreds of dollars on me at all times to buy items in cash, nor should I have to continually make trips to the post office to buy money orders if I want to buy from an online vendor that does the same thing. I'm not sure why many gun sellers do this. I think it is shady.

[PolePosition]

One thing I find odd though is that gun stores only apply the cash discount on firearms. I never see a discount on holsters, ammo, hats, etc. If they're being honest about the 3% fee, why not be honest with every item in the store?

Larger profit margins on firearm sales. Many don't report all of their firearm sales, so with cash, they actually pay less tax because it goes unreported. This particularly applies to those who offer "no sales tax" for cash sales.

Edited May 11, 2012 by PolePosition

[StPatrick]

Larger profit margins on firearm sales. Many don't report all of their firearm sales, so with cash, they actually pay less tax because it goes unreported. This particularly applies to those who offer "no sales tax" for cash sales.

I have doubts about this explanation. If the above were standard practice, those who engaged in it would be trading a 3% surcharge / margin bonus for a stay in a Federal PMITAP.

[PolePosition]

It isn't a standard practice, but it is common amongst small companies, ranging from restaurants, service, etc. Go and look at the books at businesses with 30 or less employees, and compare that with actual observed transactions, and you'll see that many evade taxes through cash sales. Small businesses generally don't have the revenue to get them audited or thrown in the federal pen (I'm assuming that's what PMITAP might stand for). But having been around sole-proprietorships all my life, its just something that you see all the time.

[Guest 6.8 AR]

Some businesses count their beans differently than others. Not all gun dealers, or any other business,

works the same as everyone else. If they post a cash price, they aren't charging you a fee for a credit

card unless you wish to use one. Base your life on cash and it will be less expensive. I don't see anything

dishonest about that. There is a cost imposed on the retailer each time they accept a credit card.

It's been that way ever since credit cards came out. I use a debit card, or a check, or better, cash.

[BigK]

All expenses, like CC fees, are eventually passed onto us consumers. Some of the ones we don't see are corporate taxes, employee health insurance and anual raises, toilet paper in the mens room, theft/shrinkage, lazy employees who take long breaks, etc.

I don't begrudge them charging me for the fees they incur when I swipe my card any more than I begrudge their employees healthcare. I think it's cool of them to let anyone willing to risk carrying around enough cash to buy a gun to opt out of the fee.

[SonnyCrockett]

my latest gun purchase with a CC had no fees,CZ75 from Damascus..no fees

my own business that run I will give a small cash disc to the buyer

if they haggle with me on price - and FYI I dont even take credit cards anymore

CASH IS KING BRO......

[Guest A10thunderbolt]

I know our credit card fee's run about 2.8% on all credit cards. If someone wants to pay cash (or check) why not give them the 2.8% back? The 2.8% is just a 3rd party wanting some of the action. on a $12,000 dollar machine that's $336.00

Edited May 11, 2012 by A10thunderbolt

[sigmtnman]

When I bought my boy's new bike a couple of weeks back, I asked for a discount for paying in cash. The fellow first said no, but then I informed him that if I were to use my cc, then they would have to pay a %. He agreed and gave me a 2.5% discount.

Edited May 11, 2012 by sigmtnman

[Volzfan]

I've bought a couple of guns from http://www.jetguns.com/ and they don't charge and CC fee. Good prices too!

[dbla]

I can understand where the OP is coming from. When you shop at Bud's online all their listed prices are "cash" prices. So if you use a card it costs 3% more. It has the appearance of being charged more. Whereas some of our LGS have their guns priced at CC prices and when we bring cash they take off 3%, so it's like we're saving some. It's all about perception IMHO.

[Caster]

I don't tolerate it. Pay cash or go home.

[gnmwilliams]

I would think it's all about cash flow. If you only take cash as payment you have immediate access to those funds to reinvest in inventory and expenses. If you take credit cards, the money doesn't do straight into your bank account. You have to wait for the merchant services company to process your transactions, deduct their fee, and then deposit the left over funds into your account. All this can take as many as five days depending on which provder you use. During this time you're without access to the funds. Cash flow is very important to a business. Especially if something important comes up like umm....payroll.

Edited May 11, 2012 by gnmwilliams

[TGO David]

Walk a mile in a retailer's shoes and a lot of comments made in this thread might be different. The consumer needs to consider that the retailer pays a fee for each credit card swipe processed and can do this one of three ways:

1. Charge the 3% as a "convenience fee" for accepting the credit card and give cash/check purchases a discount. ie "You save me some money, I'll save you some money."

2. Build the 3% additional markup into their retail prices and proudly tout that there is no extra fee for using credit cards. ie "What you don't know you're paying won't hurt you."

3. Not charge the 3% fee, not build it into their prices and lose 3% off of the profit margin of each sale. ie "I'm not in business to make money; I just like surrounding myself with pushy, hard to satisfy people all day long because it's fun."

[mcurrier]

When I accepted credit cards in my business (for 25 years up until last year), the credit card merchant agreement with Visa/Mastercard and all of the rest prohibited merchants from charging customers a fee for using credit cards. I'm not sure how these merchants are getting around it without violating their merchant agreement with the credit card processing companies. I also noticed and inquired with Visa about 4 years ago when Nashville/Metro started charging a 3% fee at places like Metro Water if you used a credit card to pay your bill at their offices. Again, merchant agreements state that that is a violation. When I called Metro for their explanation, they said that they were "exempt". Not sure how they became "exempt", I know I never was.

[TGO David]

From Visa's own web site...

http://usa.visa.com/merchants/operations/checkoutfees.html

Retailers Can Offer a Discount for Cash and Check Purchases

Retailers can encourage their customers to use other forms of payment, such as cash and checks, and can discount for PIN debit and cash and checks provided that the offer is made to all respective buyers.

So that seems to be the loophole. It's all the same math, just in how you choose to spin it.