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Comment by kazinator | Hacker News Reader

That's because the merchant won't give you a discount for handing over a wad of cash. They just pocket the extra that would have gone to the interchange fees if you had paid by credit. So you'd be stupid not to just play the game and use credit.

If a merchant gave me a solid 4% discount for handing over a wad of cash, I'd put away the credit card.

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"They just pocket the extra" is another way of describing a business' profit margin. The point here is in order to pocket enough extra to stay in business, they need to increase prices in order make up for the additional cost of credit card transactions.

They don't and can't give you a solid 4% discount for cash payments (or a credit card surcharge) because it is generally against the terms of their merchant agreement and they would be at risk of losing their ability to process credit card transactions altogether.

My original comment was merely reflecting on the fact that the perceived upside of getting rewards is dampened by increased costs that are passed all the way back through to the consumer anyway.

While it is legal for merchants to charge more for CC transactions (giving the buyer incentive to not use cards), I think this is relatively new.

It wouldn't hurt, IMHO, to just ask a vendor if they can give you a discount for cash.

Some groceries near me (given the large Asian/Indian population) simply don't accept CCs. Some accept debit cards, and give you an incentive for cash.

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