Hacker News Reader

Comment by jhbadger | Hacker News Reader

People forget that the credit card companies charge businesses to process transactions. Some stores/restaurants even give discounts for paying in cash because of this.

View on HN

In my country if you pay with credit card at a grocery store (or anywhere) you get 3.5% tacked on to your bill. Merchants don't eat the cost, and don't hide it in the listed price of goods; it's explicitly passed on.

I know its not uncommon at small business to ad a surcharge for using cards on purchases below a certain dollar value rather than a discount for cash.

This is explicitly forbidden by almost all card processing networks (and by the government, in many countries). If you report a business who is doing this to the card processor, they'll likely get their card processing privileges suspended.

What's the difference between giving discounts for cash and adding surcharges for cards?

I thought they changed the rules around this ~6 years ago, and it’s now allowed (at least in the US)?

On the other hand, cash has its costs. You need to have a register, more training, more insurance, processing of cash at the bank, having it deposit cash at the end of every day, etc.

With credit cards you pay a fee, but you don't have to deal with all of those other things that people often don't consider.

But they already have all this, there are very few merchants that don't actually accept cash at all.

If a significant amount of your business is cash based then the risk is much higher. If you're doing $100 worth of cash transactions per day then your registers and safe probably don't have much and you can probably get away with weekly or even monthly deposits. Whereas if you're dealing with $1000s in cash then you probably want to deposit daily, need a lot more security around your register and safe, and probably have a much higher quality safe too.

I've lived in Seattle for decades, and have -never- found a business that would not accept cash. If I -had- I would have set down my prospective purchase and walked out the door with a promise never to return.

Apart from a transit card (all the mass transit also takes cash ... no fee added), I'm not going to pay to feed the surveillance machine.

There have been a number of food trucks in the Seattle area that don't accept cash for the past 5 years. A popular food truck might have >$5k in cash sitting there by the end of the lunch rush - it puts an awfully tempting target on your back.

This is a function of geography.

Where I live in Seattle, a lot of businesses simply don't handle cash at all, because break-ins for the cash register are quite expensive to deal with, and they circumvent that problem by simply posting outside the business that there is no cash.

One of the few businesses near me that must take cash, a dispensary, recently had an issue where somebody tried to break in using a stolen pickup truck to crash into the building. They didn't get the cash because they didn't get past the interior bollard system, but they did cause enough structural damage that the roof partially collapsed into the street.

I mean sure, US is special in this case, especially since you don't actually persecute small time thieves...

But i've paid with cash all over europe, and except for some vending machines, i've never been turned down, be it london, paris, berlin, belgrade or athens... from large supermarkets and museums, to local corner newsstands with a small fridge and cold drinks and local fast food joints. On the other hand, the most unsafe I ever felt as a traveller was in chicago, supposedly in a "nicer/safe area", and I've been through the balkans in the 1990s.

It's pretty much required to accept cash in Seattle:

https://www.seattletimes.com/seattle-news/politics/king-coun...

This link 404s for me.

IME (in Canada), the cash discount is surprisingly close to 15%, which is approximately the sales tax in most provinces.

Here in the deep (American) South, small businesses give discounts for cash because those global elites are trying to take away our cash and want to track us or whatever. To that mindset, cash is a way to resist a theoretical oppression.

They're right :) even if it isn't a conspiracy, that's what will happen because it will be convenient and easy.

Here in the Pacific Northwest, businesses give discounts for cash just because it saves them money. In Portland, we still have a fair number of bars that are cash only. And yeah, liberals here also consider it an invasion of privacy to have to use a card, but they couch it in terms of it being unfair to people without credit or bank accounts (which, tbh, is also a fair argument).

This is the reason I try to pay everything I reasonably can with cash. I’m about as northern as you get.

I’m definitely looked as crazy in my friend group from time to time, but over the years I’ve just become known as the guy who will always have cash on him if necessary so I guess the walking ATM bit helped with acceptance of it?

I figure that if folks don’t take a stand and use cash even if they don’t need to now, we will lose the ability to later. I don’t want to live in a world where all my purchases are mineable, because that eventually turns into monitored and then authorized.

The inconvenience is a small price to pay for freedom from surveillance.

It has amused me though over the years how bad cash handling skills have become. When I was a cashier as a teenager 25+ years ago, myself and all my fellow coworkers could break change at relative light speed and often just from mental math/memory. Now it’s amusing watching a young cashier give change back on a $48.31 order after handing them a $100 bill. Sometimes takes longer than the proverbial grandma writing a check back in my day.

Same here in Argentina

It's been 10 years since I lived in Argentina, but at that point having a credit card (not a debit card) was still reserved mostly for the folks in Barrio Norte. Has that changed now, or is it still mostly debit?

It's mostly debit and digital wallets such as MercadoPago. MercadoPago will launch a credit card though, so that may change things.

In the UK this was banned in 2018. The cash price has to be the same as the debit/credit card price, which is not exactly 'freedom'.

In the US a recent change was made in the other direction. Credit card surcharges are much more common now.

I believe it was part of an agreement with the card companies over anti-competitive behavior.

Yes, mostly to avoid paying taxes on their revenue.

It's the tax evasion. Nobody ever pilfered an interchange account.

I know that this is true (I used to work in card payment infrastructure), but I've also talked to people who run cash businesses and deliberately under report their income. So I think it's not so uncommon.

Reply on news.ycombinator.com