More Retailers Offer Discounts for Cash Payments
Retailers have been offering discounts for cash payments because their pacts with credit card companies prevented them from attaching surcharges to process card payments, but new rules that went into effect in late January stipulate that businesses can charge up to 4 percent on credit card transactions, as long as they share their intentions with credit card firms and post signs that clearly inform customers of their policy. “Retailers offer cash discounts because they want to reward customers for taking [transaction] costs out of the system,” notes Jeff Lenard with the National Association of Convenience Stores. Credit card surcharges have been banned outright by 10 U.S. states, while the fees are permitted in Maryland, Virginia, and Washington, D.C. Washington-area gas stations have long tacked on an extra 3, 4, or 5 cents per gallon for payments via plastic, and the Electronic Payments Coalition’s Trish Wexler says such merchants are especially excited about encouraging cash transactions because it brings more customers into the convenience store, where they can be enticed by more merchandise. American Express and Discover have started mandating that all credit cards be subject to equal treatment, with any surcharges imposed by merchants applicable to all types of credit cards.
From “As Rules Change, More Retailers Offer Discounts for Cash Payments”
Washington Post (06/30/13) Bhattarai, Abha