Travel Agents rip off

[AlexE]

Just got round to booking my car hire with Virgin Travelstore when visiting their store in Norfolk. Without thinking passed over my Virgin credit card and was asked 'is this a credit card or debit card?' I then realised what she was saying, ie if you pay with this we will charge you 2% for the privilege! Therefore I gave her my debit card instead, ie no 2% charge!

What annoys me is that I was using a Virgin Travelstore, wishing to pay with my Virgin credit card so that I had a rental car to use when I got off a Virgin flight paid for by my Virgin air miles - surely Mr Branson is ripping me off?

OK I didn't pay the 2% charge but I did miss out on airmiles by using a debit card.

Why is it only travel agents that hit the customer with the 2% charge when using a credit card. If I went into a furniture store they wouldn't charge me 2% for the privilege, or any other store for that matter.

I was informed by the travel agent that this was an administrative fee - surely this just pushes people towards the internet (I don't think the fee is there if you use the internet) but perhaps someone will correct me on this.

Apologies for the venting but I was mad!

AlexE

 

[Claire L]

As far as I am aware the 2% fee doesn't actually get charged to you but to the company claiming the money from your credit card. I have noticed on various receipts recently such as Sainsbury that it says a charge is being made but it does not affect what you pay. Anyone else able to clarify this?
By the way paid Virgin last year by credit card - MBNA - and never got charged any more that the outstanding balance.
Claire

 

[AlexE]

Claire - thanks for the reply.

I always pay at the supermarket with my credit card and as you say it says about a fee but this included in the final amount, ie nothing to pay on top of the till charge. If I was to buy a load of say, furniture at £2,000 it would cost me £2,000.

This is I think something unique to Travel Agents which I was told was an admin fee - for what, who knows! What do travel agents do that furniture shops do not in the way of admin. Surely in the long run travel agents would only force travelers to use the internet, thereby doing themselves out of a job. Not that my opinion of the travel agents I have used in the past is high anyway.

Can anyone enlighten us as to what this 2% charge is for?

AlexE

 

[vernon]

Some credit card companies are trying to push more and more charges onto businesses. I.E. If you spend £100 on your visa card, they give the merchant £98 and charge you £100 ( charging you interest around 20% per year if you don't pay it off). I'm rapidly losing faith in credit card transactions as more of the companies try to nick their customers for charges here, there and everywhere. Only problem is that with more and more forgeries of cash in circulation ( some of them being distributed from our banks ATM's) what options do we have?

Purely co-incidentally today the top 5 banks in the UK announced record profits last year.

 

[Stuartpaul]

As far as I'm aware all credit card companies charge a fee to retailers who use their card (usually around 2 - 2 1/2%) but sometimes more. Some retailers then pass this on to the customer, - notably but not exclusively, travel agents.

An increasing number of smaller retailers now do so as well as they cannot afford to absorb the charge. Even on the internet this is becoming more common so watch for the small print!!

If you really want to sound off what about the increase in holiday prices around school holiday time? Now that IS a rip off!!!

 

[keswick1uk]

I booked online with Virgin holidays and used a credit card for the deposit. They did make a charge and I think it was 1.5%. They also told me they would for the balance but I paid that by debit card instead to avoid it.

 

[Fantasia Sam]

It's interesting that it is just the travel industry that are making these charges and they're made whether you go into the shop, pay online or use the TV travel shops.

I wonder if it's to do with cancellation of holidays etc etc to make sure they see some return on the money they've paid out if the holiday is cancelled and they have to pay the money back.

My local travel agent just started to try and charge me 2% but I insisted that as a valued customer who spends money with them each year they should waive the fee. After all they didn't charge me before why are they charging me now ? They now waive that fee on all of my bookings

 

[AlexE]

So basically, what we are saying here is that the credit card company cannot lose! They make a charge to the retailer and then they charge the card holder interest if not paid off in full every month. Potentially big bucks to credit card companies

When is the customer ever going to benefit?

AlexE

 

[vernon]

In the case of Travel agents I think this is an indication of how difficult a time they are having of it. With more and more people realising they get much better deals booking direct I think it's only a matter of time before the industry has a massive contraction. IMHO the way forward for them is specialist companies where the agents can offer expertise on the destination. Companies like Dreams, that cover just a couple of destinations, and offer real value (by potentially coming back to you with a saving) have a much better chance than companies whose staff can't possibly know every destination their company offers and who, once you've signed on the dotted line, will only move the price of the holiday up (with surcharges or fees).

 

[UKDEB]

I don't see the problem. Credit card companies charge businesses for their services. They'd be daft not to - they're not public utilities, they're profit making organisations accountable to their shareholders. In turn, those businesses (which also need to make a profit) pass on the charges to their customers, either by including it in the cost of their products or services as they do with any other overhead (in which case it's invisible to the consumer), or by making a separate charge. You could argue that travel agents are being fairer - those who don't wish to pay by credit card aren't subsidising those who do.

 

[Lobey]

There are 2 different things here:

1) As StuartPaul explains businesses have to pay charges for each debit/credit card transaction they process and some companies pass this charge on to the customer. The reason that they seem to discriminate agains credit cards (as opposed to debit cards) is that typically businesses get charged a %age fee for credit cards and a fixed fee for debit cards. For example, I accept cards in my business and I pay 1.75% for each credit card transaction and 50p for each Switch transaction. So if I were to accept a credit card for a £2000 item I'd have to pay a fee of £35 Vs. 50p for Switch!

2) The statement you see at the bottom of some till receipts saying "... includes x% for credit card processing" is a VAT loophole that will be blocked soon. Basically you don't have to pay VAT on credit card processing fees so some companies have started itemising these fees on their till receipts to cut down the amount of VAT they have to pay...

Paul

 

[MickeyMcMouse]

Here's the inside info on credit card charges.

ALL retailers who accept credit / debit cards get charged a fee by their polling company - this is the company that actually dials into the machine and polls the cards, which then distribute them to the relevant card companies. Some of this fee is taken by the polling company while the rest is past on to the relevant credit card companies.

The fees range from a percentage per transaction, any where between 1.5% and 3%+ on credit cards and a fee PER TRANSACTION on debit cards, usually between 15p and 30p+

Thats the reason why debit cards do not get charged a fee, because no matter the amount of the sale, the retailer will only get charged the set fee ie 15p

With credit cards, the fee is variable, because of the percentage and can infact be as much as £90 on a £3000 transaction. A lot to lose if the profit margin is very tight.

Now, add up all your transactions and the retailers charges will be a massive amount. ( I know ours can be anywhere between £2000 and £3000 a month)

Put your self in the retailers position for a sec. If profit margins are tight, can you afford you give away £2000+ a month, just for the privilige of accepting credit cards - over £24000 a year .....

Don't get me wrong, I am not a travel agent, but why should a retailer be out of pocket by massive amounts, just for the "privilage" of accepting credit cards .

It's a very unfair system, but there is not a lot we can do about it.

David

 

[MickeyMcMouse]

Paul, you beat me too it

David

 

[mkingdon]

As annoying as this is....I have a much more important example of this, which I think threatens the very fabric of our society.

Our local chinese take way now charges you 60p if you want to pay by cheque!!!!

What is the world coming to??

At current rates that could cost me hundreds of pounds a year

Craig (with tongue in cheek)

 

[AlexE]

Food for thought (or should it be cash for thought)

If potentially we are going to get charged for using credit, debit cards and now cheques - If I wanted to pay a travel agent, say £2,000, in cash would they charge me because they had to count it?

 

[Sue88UK]

Hi

I own a small business and I'm afraid you are right in part AlexE, that we are charged for paying in cash. Here are some of the tariffs fo my business from my bank:

Debits - Manual (eg. writing a cheque) 67p per item
Debits - Automated (eg. standing orders) 40p per item
Credits-Manual (eg. paying in a batch of cheques) 67p per item
Cheques paid in - 28p for each cheque
Cash paid in - Notes 49p per £100 paid in
Cash withdrawn - Notes 57p per £100 withdrawn
Cash Exchanged - £1.50 per £100 exchanged

My credit card charges are between 1.69% to 2.4%, Amex used to charge me 3% but I no longer accept them.
My direct debit card charges are 25p each.

I have been in business for over 10 years but as more people are using credit cards, I find it harder and harder to absorb these costs. I have to pay rental on the machinery I use and processing charges. I am seriously thinking of passing some of the charges to our credit card using & cheque using customers.

Sorry for going on, had to let it out.