Cash "Discounts" on purchases

[athena53]

For the record, I know a guy that hid a lot "under the table'. Guess what, his SS was not much when he retired.

Call me anal, but anymore, every tip goes on the CC. If I can pay taxes, you can pay taxes. Sorry, just me.

That's my concern and, to answer a previous question, I have no affiliation with the IRS other than as a taxpayer. People like the guy described above eventually end up on needs-based social programs because they evaded SS.

In addition to not paying their fair share of the cost of public benefits (roads, police force, etc.) these businesses may be evading other responsibilities. I made the mistake of having some guys passing by in a truck trim some of my trees. Their flyer said they were "fully insured". I paid by check and he came back an hour later frantic because he couldn't cash it because my bank was out-of-state. I had to go to the ATM and get real cash. Yes, it's POSSIBLE that he was accurately recording payroll/income and reporting it to his liability and Worker's Comp insurers. If, OTOH, he had zero coverage I might have been liable if they'd been injured and they might not have had coverage if a branch fell and destroyed part of my property.

 

[googily]

I bit of a tangent, but I recently gave a gift to charity. The gift was $1K. My credit card was charged for about $1,025. I guess some financial entities have figured out how not to have to bear the burden of the credit card fees. Note, I didn’t mind but it was interesting as I had never seen that done before.

I see that more and more, where when giving online there is a checkbox asking if you'll pay the fees for your having donated via credit card. I go ahead and do it.

 

[jimandthom]

Here in our end of paradise, 65 miles from Paradise and 325 miles from Hell, there is a growing number of stores that do the upcharge. Also a number of services-haircut, dog groomer and the like that do not take CC/DC but will take your check.

A couple of our frequently shopped retailers have provided us with an instore charge, to get around the fee.

 

[gwraigty]

I made the mistake of having some guys passing by in a truck trim some of my trees. Their flyer said they were "fully insured". I paid by check and he came back an hour later frantic because he couldn't cash it because my bank was out-of-state. I had to go to the ATM and get real cash. Yes, it's POSSIBLE that he was accurately recording payroll/income and reporting it to his liability and Worker's Comp insurers. If, OTOH, he had zero coverage I might have been liable if they'd been injured and they might not have had coverage if a branch fell and destroyed part of my property.

I've paid 3 contractors this year by check to avoid paying their 3% surcharges for using a credit card. I don't have a local bank. None had a problem with my checks.

 

[CaptTom]

Edit: Re debit cards, I know there was recent litigation because card processors were charging merchants the same price for CCs and for debit cards. I don't know how or if it got settled however. As a former merchant, I would probably not give a different discount for the two types just because of the amount of screwing around that might be necessary to differentiate them. Maybe in a highly automated environment like a grocery store it would be feasible to do this, though.

Gas stations have been trying to steer customers to debit cards for years. Swipe (or insert) your card and the screen shows some very misleading wording to try to get you to press the "right" button. At the place I usually go to, you have to know to press "cancel" or your credit card is used as a debit card, instead.

Apparently, merchant fees on debit cards are much lower.

Many of the chain gas stations around here now offer a "members" price of about 10 cents less per gallon. By "member," they mean someone who has signed up for direct withdrawal from their checking account, instead of paying by credit or debit card. Apparently, that's even cheaper.

I still get 5% off gas using my PenFed card, which means at anything over $2/gallon I'm getting more than 10 cents off anyway, so I've avoided both debit cards and memberships.

 

[6miths]

I remember as a kid in the early 70s standing in line behind someone who was asking for a discount for cash and patiently explained the fees on the new VISA card (remember those three stripes) to the merchant. It was an education for me. Fast forward 50 years and banking and credit card companies have perfected the art of shaving the 'Golden Crumbs' or in the case of monthly interest charges just taking a third of the cake. More power to the butcher and those paying cash!

 

[MRG]

That's my concern and, to answer a previous question, I have no affiliation with the IRS other than as a taxpayer. People like the guy described above eventually end up on needs-based social programs because they evaded SS.

In addition to not paying their fair share of the cost of public benefits (roads, police force, etc.) these businesses may be evading other responsibilities. I made the mistake of having some guys passing by in a truck trim some of my trees. Their flyer said they were "fully insured". I paid by check and he came back an hour later frantic because he couldn't cash it because my bank was out-of-state. I had to go to the ATM and get real cash. Yes, it's POSSIBLE that he was accurately recording payroll/income and reporting it to his liability and Worker's Comp insurers. If, OTOH, he had zero coverage I might have been liable if they'd been injured and they might not have had coverage if a branch fell and destroyed part of my property.

+1000

My 10 years in logging and sawmills convinced me to NEVER believe a trimmer or logger. They go out of the way to not be insured or legal.

 

[pb4uski]

I bit of a tangent, but I recently gave a gift to charity. The gift was $1K. My credit card was charged for about $1,025. I guess some financial entities have figured out how not to have to bear the burden of the credit card fees. Note, I didn’t mind but it was interesting as I had never seen that done before.

For some of the charities that I give to online they give me the option to increase the donation for x% to cover their credit card fees.... I wonder if you inadvertently elected to do that.

 

[SmallCityDave]

Yeah, except that I'm always skeptical of businesses that are all or mostly cash. Do they pay taxes on all of it? It's just a lot easier to evade the IRS, avoid paying into SS, etc. My local pro footbal.baseball stadium offers a discount if you pay for parking on-line but if you just show up with your car it's $60. CASH.

Closer to the OT, I once tried to fill my car at a gas station and found that they took only cash or debit cards- a detail not posted on the sign showing the price. Their prices matched the one down the street that DID take credit cards. I thought that was pretty darned deceptive. I left without getting any gas.

It's interesting how brainwashed our society has become, if you accept cash "a legal form of tender" you must be breaking the law and not paying taxes/ss etc.


It's logical and courteous to offer a cash discount as it's been mentioned most businesses don't have high margins and if they can save a few dollars it's great that they pass that on to us.


I deal with a fair amount of contractors and a high percentage of transactions I get a decent discount if I pay with cash (sometimes I don't even ask and they offer) I assume that they are paying taxes/ss and since I'm paying cash I doubt they think it's drug money

 

[pb4uski]

Gas stations have been trying to steer customers to debit cards for years. Swipe (or insert) your card and the screen shows some very misleading wording to try to get you to press the "right" button. At the place I usually go to, you have to know to press "cancel" or your credit card is used as a debit card, instead. ...

How would my credit card be used as a debit card when I don't have a bank account (either savings or checking) at any of the banks that issue my credit cards?

 

[OldShooter]

That's my concern and, to answer a previous question, I have no affiliation with the IRS other than as a taxpayer. People like the guy described above eventually end up on needs-based social programs because they evaded SS.

In addition to not paying their fair share of the cost of public benefits (roads, police force, etc.) these businesses may be evading other responsibilities. ...

I get all that. What I don't get from yours or any other outraged posts is why you are spun up about it. There are lots of things to not like, ranging from corrupt government officials to excesses in the UN budget. I can't imagine having the energy to get spun up about everything I don't like and I don't understand why this one is at all special.

 

[6miths]

It's interesting how brainwashed our society has become, if you accept cash "a legal form of tender" you must be breaking the law and not paying taxes/ss etc.

It's logical and courteous to offer a cash discount as it's been mentioned most businesses don't have high margins and if they can save a few dollars it's great that they pass that on to us.

I deal with a fair amount of contractors and a high percentage of transactions I get a decent discount if I pay with cash (sometimes I don't even ask and they offer) I assume that they are paying taxes/ss and since I'm paying cash I doubt they think it's drug money

Completely agree. Taking cash in order to evade taxes certainly occurs but the idea that I should pay an extra 3-5% for every last thing I purchase for the 'convenience' of not having to carry cash around is sadly hilarious. Credit card companies add very little in the way of value to the world (AFAIK) and their interest rates are usurious (though I know that they would say that there are many really, really good reasons that they should be so high).

 

[MichaelB]

Most of us here have cash back credit cards that return 1.5% - 2% of purchases, so a 3% cash discount is really 1% - 1.5%. Paying with credit card has other benefits, so I’ll continue to use it and disregard the cash discounts.

 

[GravitySucks]

I just saved 5¢ a gallon on gas by using cash.
My barber and barkeep do not accept credit cards. The barber has an ATM, the bar owner will run a tab if he knows you. Both felt the CC companies were getting to much a cut of their business.
I'm sure they both pay their taxes.

 

[braumeister]

This thread is really making me laugh, thinking about all those predictions about a cashless society being right around the corner.

 

[FANOFJESUS]

My groomer, chiropractor and hairdresser do not take any type of cards to keep costs down. Either cash or check. I am fine with that if it keeps costs down.

Most folks will get cash if they get a discount. If you think about it that is what the customer is doing right now with credit cards. I look for cash to make a semi-comeback. In a way I like this because I don't want a cash less society.

 

[Floridaman10]

If I recall correctly, credit cards initially became popular because by law they could charge these ridiculous fees so the consumer did not know the difference between cash and credit. Being allowed to do this was/is unfair to any business and because of the lack of visibility the popularity of cards exploded. Now companies can charge more for credit cards which is really fair. But cards are now so popular and ingrained in society it may never change. Now I do like my credit card and would not like to go back to a cash transactions but the ~3% charge is ridiculous. I use Venmo for no fee and would like to see fees lower substantially. But then I would have to give up my Fidelity 2% cash back on every charge.

 

[MJ]

Most of us here have cash back credit cards that return 1.5% - 2% of purchases, so a 3% cash discount is really 1% - 1.5%. Paying with credit card has other benefits, so I’ll continue to use it and disregard the cash discounts.

I agree that some purchases are better off being paid by CC if there are some benefits like extended warranty, rewind but I don'get why 3% cash discount is really 1% - 1.5%.

 

[MichaelB]

I agree that some purchases are better off being paid by CC if there are some benefits like extended warranty, rewind but I don'get why 3% cash discount is really 1% - 1.5%.

When I use my credit card I get 2% cash back. If a merchant gives me 3%, that’s only 1% more than I get with the card.

 

[OldShooter]

... more than I get with the card.

+1

 

[SheitlQueen]

I book a lot of vacation trips with a tour company that gives you a 5% discount on your balance if you pay it by check instead of credit card.

 

[Sunset]

I book a lot of vacation trips with a tour company that gives you a 5% discount on your balance if you pay it by check instead of credit card.

While 5% is nice, what you might miss out on is: 2% back on the credit card and the included trip cancellation, lost baggage coverage.

 

[travelover]

The flip side of credit cards is that people tend to spend more, and more impulsively when using a card. So, in the long run, I'm not sure credit cards cost most retailers anything. It seems stupid for monopolies, like utility companies, to accept credit cards though I take full advantage of it.

 

[SmallCityDave]

The flip side of credit cards is that people tend to spend more, and more impulsively when using a card. So, in the long run, I'm not sure credit cards cost most retailers anything. It seems stupid for monopolies, like utility companies, to accept credit cards though I take full advantage of it.

This!

 

[Mr._Graybeard]

While 5% is nice, what you might miss out on is: 2% back on the credit card and the included trip cancellation, lost baggage coverage.

Going a little OT, I noticed this fall while buying airline tickets with my Costco Citi Visa card that Citi has dropped its trip cancellation and interruption insurance benefit for travel purchases.