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I purchased a pistol from Jim Pruitt's guns and ammo about a month ago. During my purchase we discussed methods of payment the usual credit card/cash option. When I decided to pay for it cash and ran to the ATM I remember Jim telling me that it was illegal to charge somebody 3% more for making a purchase with a credit card, but that people get away with it all the time.

Is this really true?

I don't know if it's illegal but the credit card companies do NOT want their vendors to do it. I will not buy something from a dealer that does that. If they tell me they're going to charge me extra for using a credit card then I tell them I expect (the same %) discount for using cash. They scoff, I walk away and they lose a sale.

attila79 wrote:I purchased a pistol from Jim Pruitt's guns and ammo about a month ago. During my purchase we discussed methods of payment the usual credit card/cash option. When I decided to pay for it cash and ran to the ATM I remember Jim telling me me that it was illegal to charge somebody 3% more for making a purchase with a credit card, but that people get away with it all the time.

Is this really true?

I'm not sure it is illegal to pass the interchange fees on to a purchaser, but may be against the credit card company use policy. One way they get around it is calling it a 'cash discount.' There are gas stations back in the area I grew up in that sell with cash discounts. Wal-Mart does similar at their stations if you use one of their gift cards to purchase fuel instead of a credit card.

I found out at the last gun show that using your debit card as debit (and not charge) gets you the cash price.
At least it did at this dealer, AJC Sport Sales.

HighVelocity wrote:I don't know if it's illegal but the credit card companies do NOT want their vendors to do it. I will not buy something from a dealer that does that. If they tell me they're going to charge me extra for using a credit card then I tell them I expect (the same %) discount for using cash. They scoff, I walk away and they lose a sale.

From what I read about that they cannot legally charge more for a CC but can give a discount for cash. The prices at shows usually have signs indicating prices are already discounted for cash so you can't expect an additional amount discounted. You are simply paying "full" price for CC purchase. I dont agree with it but thats how it works. There was a gas station nearby doing that and I told about it and a couple days later he took down the signs he had and reworded to reflect a cash discount instead of a CC markup. It is all semantics, end result is the same.

Exerpt from http://usa.visa.com/download/merchants/ ... chants.pdf


Always treat Visa transactions like any other transaction; that is, you may not
impose any surcharge on a Visa transaction. You may, however, offer a discount
for cash transactions, provided that the offer is clearly disclosed to customers
and the cash price is presented as a discount from the standard price charged for
all other forms of payment.

Why doesn't somebody do something about this! Maybe we can start something here like the "no guns = no money" kinda thing. So it would be 3% = No $ or something in that area.

I maybe exaggerating, but it gets really annoying when I go to the gun show with plans not to buy, but then see a hell of deal on something and I find myself having to hunt down an ATM machine just to find out it ran out of money.

don't go to the gunshow. it's just how they roll.

The problem is they can do this, and will. I know one of the dealers locally and have bought from him. They have a very thin profit margin, so are not willing to change the practice. If cornered on it, they will just raise the price 3% overall. Really no different than what they do on eBay and other Internet shopping by hooking you with a low 'Buy It Now' price and then landing you with high shipping charges.

In the end, it is always Caveat emptor (Let the buyer beware.) Your job is to know the deals and shop for the best one you can get, 3% or not.

I have been caught by this at a gun show. However, I can understand why a dealer would do this and as long as they are up front about it I'm ok with it. Why should a dealer be forced to lose 3% of their profit in order for me to be able to use my CC? I don't really like it, but I understand it.

I understand the point. Credit card companies do not make their money off of interest charges. They make it off of the 3% commission charge. That reduces revenue by 3% on credit card purchases, and you as a vendor could then end up with no net profit on the item if your price is only a 3% markup over unit cost (common, especially in big-box stores).

The general answer by most retailers is to mark up all prices an additional 3% over desired margin, and charge that price no matter the payment method. That way even if 100% of people charged it, you're making your desired margin. That's the answer the credit card companies like best; they do not want any practical difference to the consumer that could discourage CC use. However, you now know you're getting screwed if you operate in cash because you're subsidizing someone else's plastic. I'm not sure which is fairer all around, but someone's gotta pay the piper when you enlist their services.

I have always heard that they can't charge extra for credit card transactions, but they CAN give a "discount" for cash, however, they have to have it posted on a sign with both prices listed. They can't have one price listed, then when you go to pay they say "Oh, but there is a 3% charge for credit cards".

I'm not sure how true this is, but it's what I've always heard....

It's a frustrating thing to deal with, but you guys have a point.

As a business owner who accepts credit cards, I have to pay a 2.7 percent surcharge for accepting the card. I neither pass that along nor do I discount for cash. I just figure it as the cost of doing business.

I'm not sure it would be illegal since the State of Texas charges a surcharge on fees paid via credit card. They don't call it a surcharge but a "technology fee."

Tom

tbranch wrote:As a business owner who accepts credit cards, I have to pay a 2.7 percent surcharge for accepting the card. I neither pass that along nor do I discount for cash. I just figure it as the cost of doing business.

chances are you operate on a higher margin than a gun show dealer.

tbranch wrote:I'm not sure it would be illegal since the State of Texas charges a surcharge on fees paid via credit card. They don't call it a surcharge but a "technology fee."

Well now that aggravates me. Paying for my tags or paying my property tax online saves everyone - fewer people to staff the courthouse, less fuel used etc. Yet I have to pay them for the privilege of paying my taxes, which BTW are already among the highest in the country. Grrrrrr