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Comment by lotsofpulp | Hacker News Reader

It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x.

Nowadays though, many sellers are offering at least 3% or higher discounts for not using credit card. My mobile network provider, home ISP, daycare and kids activities, insurance, taxes, healthcare, tradespeople, and even Target offers a 5% discount if you do not use a credit card.

It’s basically only travel, restaurants, and non Target retail that earns credit card rewards. Although sign up bonuses make it worth paying the additional credit card fees sometimes.

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Well if you can get $100 worth of X on credit card for $98, but you can buy the same thing with cash for $97, aren't you actually paying 150% of the "cash back" with your own money? ¯\\_(ಠ_ಠ)_/¯

> but you can buy the same thing with cash for $97

Merchants rarely offer cash discounts in the US.

Except nearly every restaurant I frequent. Example menu below with cash and credit prices, credit prices being 4% more. I see this commonly.

https://misslucyskitchen.com/menu

Even as somebody really disliking the current interchange fees in the US, 4% is a money grab on the merchant's side that I find hard to empathize with.

Even if the merchant pays the sticker price for card acceptance, it's usually just below 3%, unless international cards are involved. Add to that the fact that cash transactions in restaurants are often accounted for in "more tax efficient ways", and it feels even more icky.

> It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x.

The counterfactual isn't getting or not getting 2% cash back, it's the merchant paying or not paying ~3% in fees, a part of which you get back from your issuing bank as a kickback to keep participating in and advocating for this scheme.

Of course this would require regulatory action. Absent that, the status quo represents the stable equilibrium.

My point is if credit cards didn't exist, the $1 thing would cost 98c, so in that sense it's your money.

Admittedly that is overstating it a bit because not everyone uses a rewards card. In reality the 2% cashback is 1% your own money being given back to you and 1% money from people paying in cash being transferred to you (normally regressively as someone else pointed out).

If you get a discount for paying cash, then it really is just your own money

It's exceedingly rare to offer a cash discount in the US, I honestly don't think I've ever seen one in person.

I think the regulations allowing/prohibiting this vary heavily between states. For example, here are NY's rules: https://dos.ny.gov/system/files/documents/2024/04/2024-04-10...

NY’s laws are about the display of prices, but as of 2010, it is federal law that a merchant can always offer a lower cash or debit card price.

They are all over the place, especially small businesses. A cash only (paper money) price is typically less than debit card or other electronic “cash” discounts because tax evasion is assumed.

Next time you have an independent contractor do some work, after they give a price, ask them if they will accept 90% or even less if you pay cash.

My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price.

Like I said, I don't think I've ever seen them. For instance, you can't go into a Walmart or Best Buy and ask for a cash discount. Maybe a small business offers them, but I live in a small town (pop < 4k) and our grocery store and hardware store don't offer a cash discount. Neither do our gas stations offer a discount for paying for gas with cash, as the other reply mentions.

I'm not disputing they exist, just that it's exceedingly rare and not the norm.

> My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price.

I'm half joking and half serious, is he intentionally trying to confuse customers? Why do Zelle/Venmo have their own prices, and what price do I pay if I just want to pay with the debit card on my phone?

From someone who lives in bay area (so not <4k), this is exceedingly common. Of course Walmart does not have a small business owner on-site who can oversee such adjustments, but think mom and pop / single owner stores. They do it all the time.

Think contractors. They also do it all the time. When I did a remodel a couple of years back, he asked for cash. It was a small amount so I did not think much until my accountant told me I will need receipts if I wanted them added to my house's capital /cost. I asked the contractor and he stalled me for weeks while also saying I will need to pay more for receipts, until one day I forgot chasing (and am thinking of it now) and just let it go I guess.

>I'm half joking and half serious, is he intentionally trying to confuse customers?

He is sharing some of the savings from tax evasion with the customer.

I do not know if he can accept electronic payments from a debit card on the phone. I presume Zelle/Venmo is simpler than figuring out a system to separate debit cards and credit cards.

>just that it's exceedingly rare

Discounts for non credit card payment methods (such as ACH/debit card/Zelle/Venmo/paper cash) seem more and more common to me. Bigger businesses likely won't engage in tax evasion allowing for bigger discounts for paper cash, but fewer and fewer of my expenses are worth paying with a credit card.

I've seen it quite often for gasoline. Two sets of prices, one for credit, the other for debit/cash.

I've also seen it more common as a credit card surcharge (at the bottom of a menu) than a cash discount.

I'm seeing it more often. They don't say cash discount, they say they're charging a fee for using a credit card.

What annoys me is debit card fees are supposed to be capped in the U.S. But for unclear reasons many payment processors don't honor this, even large processors like PayPal and Square. Merchants tell me the debit card fee is same as a credit card.

My local government charges a 2.9% fee for use of credit or debit card as well.

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