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Comment by aeyes | Hacker News Reader

I worked at several small businesses and we always preferred cash, we even accepted multiple currencies. The handling was no problem but I admit that it must be more difficult for larger businesses.

Card payments made the price of the service more expensive for all customers because we weren't allowed to have a card payment fee.

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Small businesses put in sweat equity to handle cash payments, like the owner going to the bank to make a deposit. If they had to pay an hourly employee to do that, it might even out with credit card processing fees. Also small businesses can fudge numbers with cash payments in a way that’s a lot harder to do when some other company keeps a record of all of your cc transactions.

Yup, cash handling costs are significant when done as a service, they can be cheaper if you don't account for the time and risk (of both theft and forgery). Banks in the UK typically charge about 0.6-0.8% to pay cash in for large companies, and even more for small ones, and very few locations will take cash.

However nothing beats that sweet sweet tax evasion that cash allows.

Back when I was publishing a magazine in the 90s, I preferred credit card payments over checks in the mail because while there was the 3% vig for the merchant account on the credit cards, taking piles of checks to the bank was a pain and there was always the risk of a check bouncing (yes, there was also the chance of a charge being reversed, but in the whole time I did this, that only happened once—selling subscriptions for a print product is a good hedge against fraudulent use of cards and the one time I got stung it was someone who bought a big pile of back issues and had them shipped to Hungary). Add in that credit card orders could be handled by phone or internet while checks had to come in the mail and it was a clear win. And that’s ignoring the multiple studies that show that credit card purchasers at brick and mortar retail tend to spend more money than cash purchasers.

I also worked at small businesses and they absolutely preferred cash but not because it was easy to handle but because, you know... taxes, wink wink.

many such cases. imo it's a skill issue but understand the thought process and why it's so prevalent

From the other side, my wife owns a small business where 90% of her sales are on credit cards. She has no desire to encourage cash as we honestly report all income regardless of source (and cash is a hassle and increases theft risk). The ~3% credit card fee is also more than made up for by the higher spend of credit card buyers.

From talking to other business owners, though, the lure of "tax free" cash is definitely a factor.

>we even accepted multiple currencies

You accepted multiple currencies without taking a spread on Forex? How did you convert it for free? Not even actual forex businesses can do that...

> How did you convert it for free? Not even actual forex businesses can do that...

Actual forex businesses convert currency at negative cost. That's what it means to be a forex business.

Plenty of places in the world accept currencies besides the local ones because they are more stable or just worth more in general. Depending on the business, they might handle currency the same way too.

I usually see this only in tourist traps, where the EUR/USD price is 120% or more of the "local" price.

Oh boy. Go to Ko Chang or even Vietnam with plenty of ironed-out bills and see how much the locals like you more.

When I sold on eBay and they allowed cash/bank draft payments, I accepted local currency, but also major currencies like US$ (in cash or bank draft because I had a US$ account too) and other major currencies in cash (like EUR and GBP) because they were cheaper to convert with when travelling (or I could use directly). Without a spread.

Used the EUR in Cuba when a buyer mailed me cash.

"we weren't allowed to have a card payment fee. "

BTW. Good luck catching that. In SF, that is how many businesses work. You want to use a card? Ok, one extra dollar. Nothing enrages visa more, but, the merchant should have this right.

I think the restrictions on this have loosened over the last (not sure how many) years.

I think the law should be that you state the maximum price for a given transaction and then discount down.

So you can have a cash discount but it's okay to say no credit card fees. These are the "junk fees" that came up in political discourse in the last year or two. Credit card vendors shouldn't be allowed to restrict cash discounts. I know this isn't libertarian, but I want it to be a pre-negotiated thing simply for the sake of keeping cash alive, like how minimum wage is a pre-negotiated wage to avoid the overhead of getting the whole nation into a labor union.

That's why I like free shipping on Amazon. I know it's not literally free, I just want to see what you're _actually_ gonna charge me, it cuts off an avenue of bullshit.

In a properly working market, every consumer would pay their exact interchange fee and it would be printed on the receipt as a pass-through cost.

This would actively drive interchange fees lower when consumers have to choose to pay 3% on an Amex swipe vs 1.6% no frills MasterCard swipe, or .05% for a debit swipe.

The reasons there is no downward pressure today is because there is because there is no transparency, and no incentive for consumers to choose a lower cost card.

One of the best marketing phrases I've seen to charge a fee to use a credit card:

Convenience Fee.

Massachusetts and Connecticut are the two states that have laws banning credit card surcharges. Massachusetts also has a law requiring acceptance of cash.

Between the Massachusetts Right to Repair Act and requirement to accept cash (Part III, Title IV, Chapter 255D, Section 10A), that state is looking more and more like the right kind of place for me to land once I'm done doing the FAANG thing. Convince me otherwise.

This isn't really true for Connecticut, because the law allows for a "cash discount" which is functionality identical.

https://portal.ct.gov/DCP/Legal/Credit-Card-Surcharge

>Connecticut law prohibits a business from charging a customer a surcharge for using one payment type (usually credit card) over another payment type (usually cash). However, the law does allow a business to offer a discount if a customer chooses to use one type of payment (e.g., cash) over another type of payment (e.g., credit card). Receiving the discount is not the same as adding a surcharge. As long as the discount policy is clearly written and presented to the customer and the final receipt shows a discount, it complies with Connecticut law

At least it requires them to be honest about what they're charging, I guess, which is more than I can say about the CT DRS.

Or what I've seen some people do here in Mexico: 3% discount when paying in Cash :-)

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