Cashless / Credit Card Fee - A New One for Me

[soccerdad72]

I know we've had a dozen different threads on cashless businesses as well as credit card fees, but I had a new one (for me) pop up last week.

I was in New Orleans for a work conference and my wife and I went to go get dinner one night. The host stand had a prominent sign saying that they're a cashless restaurant (no big deal), but what surprised me was when we got the menus, at the bottom, it mentioned that there was a 3% fee for using a credit card.

Now I've paid that fee hundreds of times now (I don't usually carry a lot of cash), so I know that's just a cost being passed along these days, but if you've made yourself a cashless business AND you're not giving patrons a way to avoid the fee associated with credit card usage, should that be legal? If nothing else at this point, why not just build 3% extra into the menu items?

 

[mjkacmom]

I agree with you, they should just raise prices 3%, I’d be annoyed if I could only use credit and it appears there is an added cost fir using credit.

 

[BrianL]

Yeah - how can there be a fee for the only form of payment accepted? That's pretty wild.

 

[tony67]

That's a new one on me - I had to read through it a couple times just because it does not make sense.

Only thing I can figure is that they just changed to cashless because people complained about the fee and they have not made changes to the menu yet and most of the business was CC anyways.

As for legal - its posted on the menu so Id assume so.

 

[EACarlson]

It's almost certainly a violation of their contract with their POS provider. In almost all of those contracts it stipulates that you can't add a surcharge for cards. The only thing I can think of is if you can avoid the fee by paying as debit and not credit.

 

[tvguy]

Well, it is a way of disclosing to their customers the actual cost of using credit cards. Sort of like San Francisco restaurants.......when the law required them to provide health insurance to all employees.....they added a 5 or 6% surcharge for employee health insurance.
May also be a way for them to test the waters on whether they want to remain credit card only. This is not a situation I have seen myself. All I know is I don't know how people can't carry cash, AND a credit card. You kind of have to be prepared for anything anymore.

 

[tvguy]

It's almost certainly a violation of their contract with their POS provider. In almost all of those contracts it stipulates that you can't add a surcharge for cards. The only thing I can think of is if you can avoid the fee by paying as debit and not credit.

I don't that has been the case for many years. I do think the merchant can't charge more than they pay their POS provider for processing the charge.

 

[MsChristy12]

The legality of CC fee varies state to state. Only a few states that's illegal, and I know CA is one of them as they got banned last year. I live in a state that this is totally legal, as long as it's stated clearly on their menus/premise. When restaurants do this, in my POV they are just lazy and want the fees to be separated on the ledger. If your bookkeeping is clear and organized, it's very easy to re-code it and have the calculation setup for daily/weekly/monthly, however you wanna do it. Some argue they want the consumers to be aware of the fees so that's why it's spelled out separately, but I disagreed. At the end of the day, it's the same thing raising your menu price by 3% or charging additional 3%. However, the latter always rubs consumers the wrong way (myself included), so why wouldn't establishments just include that in menu pricing? No clue.

 

[kdonnel]

If nothing else at this point, why not just build 3% extra into the menu items?

My best guess is the owner of the business is stupid is the reason.

Consumers don't want to see every business expense broken out, why should they break out banking fees? What makes them more special than labor or utility costs that they should be highlighted?

I don't want to see that my $10.00 meal consists of:
$3.50 food cost
$3.00 labor
$1.00 utilities
$0.50 other - marketing, insurance, banking
$2.00 profit

I just want to see that it is $10.00.

 

[gsdweller]

There are lots of other ways to pay now that don't involve credit cards and the fees. Venmo for instance.

 

[soccerdad72]

There are lots of other ways to pay now that don't involve credit cards and the fees. Venmo for instance.

None of the other electronic forms of payment appeared to be an option at this restaurant. At least nothing was mentioned on the menu nor mentioned by our server.

I've not seen a restaurant (at least not a normal sit down establishment) offer ePayment as an option so far (Venmo, PayPal, Zelle, etc.). Has anyone seen this at a restaurant?

 

[gsdweller]

I have. But it is rare. And I haven't seen it any time recently.

 

[Jodo98]

There are lots of other ways to pay now that don't involve credit cards and the fees. Venmo for instance.

zelle too. At my nail salon, they are giving option to either pay the fee or zelle the amount to the business.

 

[soccerdad72]

I have. But it is rare. And I haven't seen it any time recently.

I'll have to keep a look out at other places we go. I'd be fine with most of those, except that I would lose out on rewards.

 

[EACarlson]

I don't that has been the case for many years. I do think the merchant can't charge more than they pay their POS provider for processing the charge.

How exactly do you know what is in their contract?

The legality of CC fee varies state to state. Only a few states that's illegal, and I know CA is one of them as they got banned last year. I live in a state that this is totally legal, as long as it's stated clearly on their menus/premise. When restaurants do this, in my POV they are just lazy and want the fees to be separated on the ledger. If your bookkeeping is clear and organized, it's very easy to re-code it and have the calculation setup for daily/weekly/monthly, however you wanna do it. Some argue they want the consumers to be aware of the fees so that's why it's spelled out separately, but I disagreed. At the end of the day, it's the same thing raising your menu price by 3% or charging additional 3%. However, the latter always rubs consumers the wrong way (myself included), so why wouldn't establishments just include that in menu pricing? No clue.

I'm not talking about legality, where the restaurant is going to be charged by the state attorney general if they violate it. I'm talking about the contract they have with their processor, which the processor can sue or discontinue service due to breach of contract if it's violated.

 

[leebee]

Charging the credit card fee annoys me. Taking credit cards is just part of the cost of doing business. Don't want to take my card without charging me the fee? I can always take my business elsewhere.

ETA: Maine law prohibits sellers from adding a surcharge for credit card fees. They can, however, offer a cash discount.

 

[eticketplease]

It's almost certainly a violation of their contract with their POS provider. In almost all of those contracts it stipulates that you can't add a surcharge for cards. The only thing I can think of is if you can avoid the fee by paying as debit and not credit.

Correct most agreements state this for taking cards.

The fees are a part of doing business and are real business expenses which can in turn be claimed on their tax returns.

My question is what can customers do to have the fees passed on to us?

 

[DizneyFamof4]

How exactly do you know what is in their contract?

I'm not talking about legality, where the restaurant is going to be charged by the state attorney general if they violate it. I'm talking about the contract they have with their processor, which the processor can sue or discontinue service due to breach of contract if it's violated.

All of the POS processors that we have talked with, had the option to charge a CC fee inside their program and it was up to us whether or not we wanted to pass the CC fee onto our customers. They hide it as a "Convenience fee", but it is in fact to pass on the CC fees.

 

[tvguy]

How exactly do you know what is in their contract?

I'm not talking about legality, where the restaurant is going to be charged by the state attorney general if they violate it. I'm talking about the contract they have with their processor, which the processor can sue or discontinue service due to breach of contract if it's violated.

Certainly circumstantial. I would think IF it was in their contract....... since they are openly doing it, their POS provider would terminate their service. That does not appear to be happening.

 

[MsChristy12]

I'm not talking about legality, where the restaurant is going to be charged by the state attorney general if they violate it. I'm talking about the contract they have with their processor, which the processor can sue or discontinue service due to breach of contract if it's violated.

I didn't refer that to your comment specifically...I didn't even quote you. OP said "should that be legal".