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Frank Hovis

Credit card fees banned - bad news

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A. As of January 13, all surcharges for paying with either a credit or debit card will be banned under new EU rules to help improve transparency and fairness. This includes linked ways of paying such as PayPal or Apple Pay and applies to any online payments, credit transfers and direct debits.

 

Credit card fees have always made sense for me; if the retailer has to pay more for a credit card transaction than a debit card one then they can pass this extra charge on.  This seems eminently both transparent and fair.

This is now banned under the usual spurious weasel words of "transparency and fairness" when it is the exact opposite thereof.

The motivation seems to be to hurry the take up of payment cards like that Tuxedo one, which was Tesco's only option for temps' pay this Christmas, and the normalisation of their charges so that we get to the point of people paying everything on these, a cut and record taken of every purchase, and one more person not using cash.

The underlying aims of this being control, monitoring, and people routinely spending themselves into debt which they wouldn't do if they were dealing in cash.  So pay day loans aplenty as everyone becomes one pay check away from bankruptcy.  Compliant slaves.

I will be looking out for any retailer brave enough to follow the places who banned certain high charging credit cards - Amex, Diners - rather than up the prices for all of their customers.

 

http://www.plymouthherald.co.uk/whats-on/shopping/ban-shops-charging-use-cards-1047985

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Oh for God's sake! I charge people using credit and debit cards, and PayPal 3.4% extra, as it costs me 3.4% extra, and 20p per transaction. I let them off with the 20p but I'm not keen on having my cash/bank transfer paying customers pay the fees of people using credit or debit cards, or paypal. 

Tempted to either keep charging card/paypal fees, or just stop accepting these payments altogether.

If I had a clothes shop I would want to charge more for a large t shirt than a small one, that would be fair.

Fucking EU! We were supposed to have escaped already!!

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6 minutes ago, Carl Fimble said:

Oh for God's sake! I charge people using credit and debit cards, and PayPal 3.4% extra, as it costs me 3.4% extra, and 20p per transaction. I let them off with the 20p but I'm not keen on having my cash/bank transfer paying customers pay the fees of people using credit or debit cards, or paypal. 

Tempted to either keep charging card/paypal fees, or just stop accepting these payments altogether.

If I had a clothes shop I would want to charge more for a large t shirt than a small one, that would be fair.

Fucking EU! We were supposed to have escaped already!!

I'd just note that you might pay that sort of %age, but the big retailers that charge these fees don't pay anything near.

I'd also note that you shouldn't think of the fees in this way.  They're just a cost of doing business, just like all the others -- you should wrap them up in your cost to customer.  After all, they're unavoidable -- even cash has a 'cost of transaction' associated with it. 

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2 minutes ago, Cunning Plan said:

Just put your prices up 5% and then give 5% discount for cash.

You can't do that under the law, though you can have a subset of preferred loyal customers to whom you give this 5% loyalty bonus.  You select who these customers are and it would be just pure coincidence if they happened to be the ones who paid by bank transfer.

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1 minute ago, Frank Hovis said:

You can't do that under the law, though you can have a subset of preferred loyal customers to whom you give this 5% loyalty bonus.  You select who these customers are and it would be just pure coincidence if they happened to be the ones who paid by bank transfer.

So the EU have taken away one of the free market principles of negotiating?

In smaller (owner run) shops I would always wave my Amex card at the till, and then ask for a discount for cash.

Nearly always got one.

 

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1 minute ago, Cunning Plan said:

So the EU have taken away one of the free market principles of negotiating?

In smaller (owner run) shops I would always wave my Amex card at the till, and then ask for a discount for cash.

Nearly always got one.

 

Yup.  Though your example would still work as they would just apply a discretionary discount because they liked you rather than because you were paying in cash, absolutely no sirree.

 

Quote

 

Q. So are all extra charges on purchases banned now?

A. No, the ban does not include fees that are not linked to the payment method such as booking fees for theatre, concert and cinema tickets or charges for using certain cash machines.

Companies will still be able to add booking or administration fees as long as they also apply to other forms of payment and they can still set a minimum card payment.

 

 

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16 minutes ago, dgul said:

I'd just note that you might pay that sort of %age, but the big retailers that charge these fees don't pay anything near.

I'd also note that you shouldn't think of the fees in this way.  They're just a cost of doing business, just like all the others -- you should wrap them up in your cost to customer.  After all, they're unavoidable -- even cash has a 'cost of transaction' associated with it. 

Yeah, I only get charged so much because I put so little through as card payments. 

I have £0.00 costs with cash or bank transfer payments though, cheques too are free to process, though a pain in the arse.

I really object to this, its not fair everyone should have to pay just because some pay in a way that costs me money.

11 minutes ago, Cunning Plan said:

Just put your prices up 5% and then give 5% discount for cash.

I like this idea.

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8 minutes ago, Frank Hovis said:

You can't do that under the law, though you can have a subset of preferred loyal customers to whom you give this 5% loyalty bonus.  You select who these customers are and it would be just pure coincidence if they happened to be the ones who paid by bank transfer.

This idea I like too. I still believe it is only fair that customers are charged for the costs incurred on their jobs, I really would like card/Paypal customers to pay their own fees.

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21 minutes ago, Frank Hovis said:

You can't do that under the law, though you can have a subset of preferred loyal customers to whom you give this 5% loyalty bonus.  You select who these customers are and it would be just pure coincidence if they happened to be the ones who paid by bank transfer.

Indeed, you could award a discount at your own discretion as the owner, but could not state it was for paying cash.

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I may be mistaken but I thought that once upon a time it was part of the contract between the retailer and the credit card operator that the price should be the same whether the payment wa sby credit card or any other means.

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31 minutes ago, Rare Bear said:

I may be mistaken but I thought that once upon a time it was part of the contract between the retailer and the credit card operator that the price should be the same whether the payment wa sby credit card or any other means.

Maybe for the little guys but the big players make their own contracts.

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1 hour ago, Carl Fimble said:

I really object to this, its not fair everyone should have to pay just because some pay in a way that costs me money

Well it costs short term, but you get to claim it back as an expense.

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14 minutes ago, Libspero said:

We need fewer politicians (especially European ones).  We employ far too many people to make rules and laws in this country.. we have enough already thanks!

I would vote for this  :Beer:

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1 hour ago, Reebo said:

Well it costs short term, but you get to claim it back as an expense.

Kinda, I'm not claiming it back in the way someone with a job might be able to claim back things as expenses though. I see it more like an extra fee which only ever used to apply to people paying with cards or paypal, it sounds like I'm to either absorb the cost myself, or hit every single customer with an extra £X.XX amount of money to attempt to recover the losses I will be making from the card/paypal fees. I have no idea of knowing how many customers will pay by card/paypal in the coming days/weeks/months/years so will probably end up having to just pick a number to add to every single job, I would guess £1 would cover it but maybe £2, fuck knows- too many variables, if I had all the info it would be quite a simple calculation (yearly amount paid in card/paypal fees/number of customers), that shits on people having a small job done, and isn't fair even if it was proportionally applied. Tempted to stop offering card payments altogether, I like the fact I can accept card payments though, always thought that made me seem really legit when I first started the business!

So, every single one of my customers will be made to pay for the few who use cards/paypal, or I will have to take the hit myself, or come up with some complicated "special customer loyalty bonus discount scheme" bullshit. The government should fuck off, the EU should have already fucked off, aaaargh!

Edited by Carl Fimble
deshitifying attempt

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3 hours ago, Carl Fimble said:

Kinda, I'm not claiming it back in the way someone with a job might be able to claim back things as expenses though. I see it more like an extra fee which only ever used to apply to people paying with cards or paypal, it sounds like I'm to either absorb the cost myself, or hit every single customer with an extra £X.XX amount of money to attempt to recover the losses I will be making from the card/paypal fees. I have no idea of knowing how many customers will pay by card/paypal in the coming days/weeks/months/years so will probably end up having to just pick a number to add to every single job, I would guess £1 would cover it but maybe £2, fuck knows- too many variables, if I had all the info it would be quite a simple calculation (yearly amount paid in card/paypal fees/number of customers), that shits on people having a small job done, and isn't fair even if it was proportionally applied. Tempted to stop offering card payments altogether, I like the fact I can accept card payments though, always thought that made me seem really legit when I first started the business!

So, every single one of my customers will be made to pay for the few who use cards/paypal, or I will have to take the hit myself, or come up with some complicated "special customer loyalty bonus discount scheme" bullshit. The government should fuck off, the EU should have already fucked off, aaaargh!

I'm self employed and I claim back all fees on my expenses. It's a bank charge, and thus an expense like fuel stock etc. Add it up and put it on your expenses at tax time.

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The credit card fee is a cost of doing business, as said. It does however bring some savings as the money from the transaction is paid directly into the retailers bank account, saving a trip to the bank. The risk of dishonoured cheques is reduced, chargebacks can still occur though so there is a small risk, The risk of theft is eliminated, a thief can't steal the electronic transaction whereas currency can be stolen.  Banks impose charges for depositing cash these days as well. Partly the reason why supermarkets encourage customers to take cash back when they pay by debit card.

So its not all a cost that the merchant has to incur there is a cost saving aspect as well.

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Purely as a consumer I like this move due to the fact I can pay by CC without paying extra and benefit from section 75/chargeback protection that paying by CC provides. 

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14 hours ago, Libspero said:

Interesting VAT angle..  I never knew about the tax exemption angle which does explain a lot.

Broadly speaking,  from a customer perspective and not being involved in retail at all I have never really objected to the fees..  it just made sense that CC payments cost more the DC payments therefore that cost is passed on.  As a consumer you could avoid that cost if you wanted.  Now you can’t.  I fail to see how this in any way benefits the consumer..  just more rules and beaurocracy for the sake of it. 

We need fewer politicians (especially European ones).  We employ far too many people to make rules and laws in this country.. we have enough already thanks!

It is all about encouraging people into debt.

To pay by cash or DC you need to actually have the money.

CC money is always borrowed even if a lot of people pay off the loan before interest is accrued. Total Credit Card debt in the UK is about £70 billion.

 

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1 hour ago, Virgil Caine said:

It is all about encouraging people into debt.

To pay by cash or DC you need to actually have the money.

CC money is always borrowed even if a lot of people pay off the loan before interest is accrued. Total Credit Card debt in the UK is about £70 billion.

 

Only a very minor caveat but because I pay a big cheque onto my credit card every ten months or so I am usually making the payment on credit card from my own money which I have put onto the card.

I can't be the only one who does this (surely) as it's convenient.

So not all CC money is borrowed and there will be credit balances like mine netting down that debt.

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2 hours ago, Frank Hovis said:

Only a very minor caveat but because I pay a big cheque onto my credit card every ten months or so I am usually making the payment on credit card from my own money which I have put onto the card.

I can't be the only one who does this (surely) as it's convenient.

So not all CC money is borrowed and there will be credit balances like mine netting down that debt.

I had never heard of anyone doing that. I had thought there were three kinds of credit card customer before :

1 : Rich folk using the card for convenience, paying the full balance off every month before interest was applied.

2 : Card sluts using the 0% interest deals to "make" money/give themselves interest free loans.

3 : Folk paying what they can each month, sometimes just paying the minimum amount, usually paying interest. 

 

Your way of working it sounds to me like you are giving the credit card company an interest free loan. Would it not make (a slight bit) more sense to chuck your lump of cash into an account gaining (even a shitty bit of) interest, and having a direct debit set up to pay the full balance each month?

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42 minutes ago, Carl Fimble said:

I had never heard of anyone doing that. I had thought there were three kinds of credit card customer before :

1 : Rich folk using the card for convenience, paying the full balance off every month before interest was applied.

2 : Card sluts using the 0% interest deals to "make" money/give themselves interest free loans.

3 : Folk paying what they can each month, sometimes just paying the minimum amount, usually paying interest. 

 

Your way of working it sounds to me like you are giving the credit card company an interest free loan. Would it not make (a slight bit) more sense to chuck your lump of cash into an account gaining (even a shitty bit of) interest, and having a direct debit set up to pay the full balance each month?

It would be if interest was noticeable but because rates are so rubbish I no longer have any interest bearing accounts just a current account so, for me, there is no loss of interest and my only real cost is a second class stamp to send off the cheque once a year.

I thought more people would do this but maybe it is just me!

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