[net.consumers] Cash-payers: take note

uname@pyuxqq.UUCP (Admin) (04/04/84)

I see that the US House of Rrepresentatives has passed a bill forbidding
credit card surcharges.  THIS IS OUTRAGEOUS INSULT TO CASH PAYING CUSTOMERS.
It in effect forces cash payers to subsidize the %^&%%$## credit card
users because of the added cost credit cards are to merchants.
Card users should pay the FULL freight involved with their buying habits.
Lets hope the Senate will reject the bill or that Reagan will veto it.

werner@ut-ngp.UUCP (04/05/84)

<debugger>

yes, they disallow surcharges to credit-card buyers, but not discounts to
cash-payers, as you can see at nearly every Exxon-station.

So why don't we see more discounts?  Seems as if stores benefit in many
ways when customers use credit-cards, less cash to steal, fewer hot-checks,
automatic book-keeping.  And, of course, they don't want to start a brawl
with their bankers about credit-cards, so they don't discount.  Of course,
if there was a way to benefit both the store and the bank, and suck it
to the consumer - ah, but they found that one already, didn't they.

spear@ihuxm.UUCP (Steven Spearman) (04/05/84)

It is not clear that credit card surcharges make using credit
significantly more expensive than handling cash.  Typically,
most businesses just take their cash handling expenses as given
and don't compare them to the 3-5% charge for most bank cards.
-- 

Steve Spearman
ihnp4!ihuxm!spear

lat@stcvax.UUCP (Larry Tepper) (04/05/84)

As I understand it, although the House forbid surcharges for credit
card purchases, a new bill is in the works to allow discounts to
cash paying customers.  Apparently it's illegal to penalize consumers
with surcharges.  In some bizarre sense this seems like the legislative
version of DeMorgan's law:  you penalize the cash customers with a
negative surcharge.
-- 
	Larry Tepper - Storage Technology (disk division)
	uucp:	{ decvax, hao}!stcvax!lat
		{ allegra, amd70, ucbvax }!nbires!stcvax!lat
	USnail:	Storage Technology Corp  -  MD 3T / Louisville, CO / 80028
	DDD:	(303) 673-5435

ron@brl-vgr.ARPA (Ron Natalie <ron>) (04/05/84)

As a matter of fact, American Express sent me a letter along with some
cards to mail in to my senators and congressman supporting the bill.  If
you wish, I'll type it in for those of you who insist on using cash.  By
the way, you might be aware, but the tone of your letter indicates otherwise.
This bill has been in effect for years now.  It only recently lapsed and
is being renewed.

-Ron

ron@brl-vgr.ARPA (Ron Natalie <ron>) (04/05/84)

WARNING:  In many states your AMOCO and EXXON cards are not CREDIT cards.

When they started the "discount for cash" policy in Maryland, I was informed
that to keep things legal they were discontinuing giving me credit.  They said
I would have to pay off my GAS bill at the end of each month (which I do anyway
so big deal) and if I didn't they would charge me a 1-1/2 percent late charge
(sounds like finance charge to me).  Clever wording sometimes helps.

-Ron

billp@azure.UUCP (Bill Pfeifer) (04/05/84)

----------
>   I see that the US House of Rrepresentatives has passed a bill forbidding
>   credit card surcharges.  THIS IS OUTRAGEOUS INSULT TO CASH PAYING CUSTOMERS.
>   It in effect forces cash payers to subsidize the %^&%%$## credit card
>   users because of the added cost credit cards are to merchants.
>   Card users should pay the FULL freight involved with their buying habits.
>   Lets hope the Senate will reject the bill or that Reagan will veto it.

I saw that on TV also.  The commentator commented that though surcharges for
credit card use are illegal, cash discounts are OK.  Therefore:

Regular price of item: $1.00
Cash Price: $1.00
Credit Card Price: $1.05
This is illegal.

Regular price of item: $1.05
Cash Price: $1.00
Credit Card Price: $1.05
This is allowed.

Cute, isn't it?

	Bill Pfeifer
{ucbvax,decvax,ihnp4,allegra,uw-beaver,hplabs} !tektronix!billp

mkg@whuxle.UUCP (04/06/84)

#R:pyuxqq:-60700:whuxle:47400001:000:617
whuxle!mkg    Apr  6 11:28:00 1984

The removing the ban on surcharges on credit card purchases would NOT
cause "discounts for cash" but rather "price gouging for credit".

Do you really believe that prices will drop for cash purchases if the
ban were lifted.  I don't.  Instead, prices will remain the same and
credit prices will rise.  Look at what Exxon and other oil companies
did with their "discount for cash" scheme.  Did gasoline prices really
drop for cash purchases?  At first, there was the appearance of a real
discount but after a month, the "discount for cash" price was the same
as the old cash/credit price.
  Marsh Gosnell   whuxlb!mkg

mats@dual.UUCP (Mats Wichmann) (04/07/84)

It has been suggested that allowing a surcharge for credit card purchaes
would only stimulate gouging for credit cards, not lower prices for cash
purchases. The example used to illustrate this was gas purchases, a 
singularly poor example for price comparisons. Gas prices fluctuate by
fairly large amounts on what is pretty much a weekly basis (although
they haven't been hopping quite as much recently as in the past). The
statement that after a month the prices with cash discount were at the level 
the  non-discounted price had been at ignores the possiblity (even, probability)
that the prices rose by that amount during the month. While I am not
arguing that the suggested situation might in fact occur, I would like
to see an example that shows it a little better. Can anyone think of
another example?

	    Mats Wichmann
	    Dual Systems Corp.
	    ...{ucbvax,amd70,ihnp4,cbosgd,decwrl,fortune}!dual!mats

wm@tekchips.UUCP (Wm Leler) (04/09/84)

The comparison of cash discounts on gasoline to credit surcharges
*is* fair.  You just have to compare the discounted cash price
at stations that offer cash discounts to the regular (only) price
at stations that do not offer offer cash discounts.  I think you
will see that there is a strong relationship between these two
prices, and the stations that say they are offering a cash discount
are in fact charging a surcharge for credit.

This is reasonable as long as the price that is advertised is the
regular price.  Unfortunately, most stations I know advertise
(on the signs in front of the station) the cash price, which in
effect makes explicit that these are credit surcharges, not cash
discounts.  There is one stations near here where the price on
the sign looks pretty good (for a major oil company), until
you drive in and find that that price is only if you pay cash, and
only if you get a fillup, and only if you purchase a minimum amount.
That scam made me feel really burned, even though I was paying cash,
getting a fillup, and buying more than the minimum amount, and I
don't go there anymore.

I feel this sort of thing would be more common if credit surcharges
were made legal.  Businesses charge what the market will bear,
constrained by what their competitors charge.  If a store can
advertise a lower price and then charge extra if you use a credit
card, they will.  But what business will advertise a price and
then give a cash discount?  You see, they are the same, but they
are different.  That is why one is legal, and has always been,
but the other is illegal.

I hate surcharges, little add ons and such.  When I bought
my house it seemed that of the cash I had to cough up to buy
the thing, less than half actually went into the down payment
(i.e., into my equity), and the rest went to countless little
charges and payoffs.  I have three pages listing all of them,
and all of them are legal and customary.  Everyone had their
hand deep in my pocket, especially the bank (did you know
that last year, on the average, banks paid -12.6% of their
income in taxes; yes, that was a negative number [source:
article in this Sunday's paper, in Parade, I think]).

I believe that making credit surcharges legal will only serve to
raise prices and make buying things more complicated.  Oregon
has no sales tax, and property taxes and personal income taxes
are very high because of it.  Since sales taxes are regressive,
and my income bracket is high, I would be much better off with a
sales tax.  But the pleasure of buying something and paying
exactly the price they advertise is more than worth it to me.

I suppose that since you in the rest of the country are used to
having a 5 or so percent surcharge added onto your purchases,
you wouldn't mind a credit surcharge.  So how about if Congress
makes them legal everywhere but Oregon? :-)

			Wm Leler    503/627-5151
			wm.Tektronix@csnet-relay
		{ucbvax|allegra|decvax|ihnp4}!tektronix!wm

ljdickey@watmath.UUCP (Lee Dickey) (04/10/84)

 > Regular price of item: $1.00
 > Cash Price: $1.00
 > Credit Card Price: $1.05
 > This is illegal.
 > 
 > Regular price of item: $1.05
 > Cash Price: $1.00
 > Credit Card Price: $1.05
 > This is allowed.
 > 
 > Cute, isn't it?

Yea, its politics.  You did not expect it make sense.
-- 
  Lee Dickey, University of Waterloo.  (ljdickey@watmath.UUCP)
		...!ucbvax!decvax!watmath!ljdickey
		      ...!allegra!watmath!ljdickey

rowan@convex.UUCP (04/10/84)

#R:pyuxqq:-60700:convex:57100002:000:563
convex!rowan    Apr 10 15:13:00 1984

It's not clear that cash transactions are any cheaper for retail stores
than credit cards.  Most banks charge commercial customers for EACH
check deposited.  There are charges for returned checks, for rolls of
coins and in some places for straps of currency.  Banks have found that
they can nickel and dime their commercial customers as well as
individuals.  Oh, for the good old days of free checking without $2500
minimum balances and no `membership fee' credit cards!

Steve Rowan
Convex Computer Corp.
{allegra,ihnp4,uiucdcs,ctvax}!convex!rowan
(214)669-3700

ron@brl-vgr.ARPA (Ron Natalie <ron>) (04/11/84)

Yes.  Think of it this way.  How many stores that if allowed to charge
extra for credit purchases will prominantly state this fact in their
advertisement.  I too am very annoyed when I buy something on sale and
whip out my credit card and am told there will be a 3% surcharge because
the sale price only applies to cash purchases (where did it say that in
the Ad, or on your door, or posted anywhere but on a 3x5 card glued to
the register...FOO).  This happened to me once in my favorite (grumble)
record store.  I don't know if it's legal, but they sure seemed to be
getting away with it.

-Ron

Food for thought:  How come four $50 tires costs $300 by the time you
drive out the door?  You want them on the car?  No thanks, I'll eat them
here.  - Gallagher

mark@cbosgd.UUCP (Mark Horton) (04/11/84)

	This is reasonable as long as the price that is advertised is the
	regular price.

Another example of this kind of ripoff occurs in magazines like PC and Byte.
These places with full page ads listing prices on the framus 900 PC gizmo
look pretty good, until you see the fine print hidden somewhere that the
prices are for cash, or represent a cash discount.  The notion of a "regular
price" is about as bogus as a "list price".

mats@dual.UUCP (Mats Wichmann) (04/13/84)

If, in fact, the gas stations are POSTING the `discounted' price as
the regular price, and only later do you find out that credit purchases
cost more, are they then not actually breaking this law we have been
talking about? 

    Mats

rpw3@fortune.UUCP (04/14/84)

#R:pyuxqq:-60700:fortune:39400007:000:773
fortune!rpw3    Apr 13 19:57:00 1984

Worse still, there is a Chevron station on El Camino Real in San Mateo
just south of Hwy 92 (yes, I'm MAD!) that posts "cash" prices on big
signs by the road (o.k.), has the pumps charge you credit card or
"normal" rates on the meter (still o.k. so far, the little computer
in the cash register prints the meter reading on the credit slip and
the "cash discount" is rung up separately), BUT...

...after dark, this "24 hour" station charges you credit-card rates
for cash fill-em-up purchases. (Bogus "cost of security"???) There
is NO sign that tells you that. You don't know 'til you go to pay.

Rob Warnock

UUCP:	{ihnp4,ucbvax!amd70,hpda,harpo,sri-unix,allegra}!fortune!rpw3
DDD:	(415)595-8444
USPS:	Fortune Systems Corp, 101 Twin Dolphin Drive, Redwood City, CA 94065

acu@stat-l (Shoe) (04/14/84)

I mailed the postcards American Express supplied to complain to one's
congressman and senators about credit surcharges.  In reply, I got a
letter from my congressman (John Myers, 7th district, Indiana), the
meat of which is reproduced below:

    "...This has been a highly controversial issue with the Senate and
    House taking opposite positions. The Senate, which wants to allow
    surcharges, passed a bill on February 28 to permanently lift the
    surcharge ban and allow surcharges of up to 5 percent on credit
    card purchases. Senator Alfonse D'Amato (R N.Y.) offered an
    amendment to the bill to impose a permanent ban on surcharges, but
    it was defeated by a vote of 22 to 66. The House Banking Committee,
    which wants a permanent surcharge ban, refused to consider the
    Senate bill. Similarly, the Senate vowed to block any bill
    providing for a permanent ban on surcharges passed by the House.

    To break this impasse, the House passed a compromise bill on April
    3 to temporarily extend the ban on surcharges for 14 months, until
    May 13, 1985. I voted for the bill. The bill, H.R. 5026, also
    provides for a study by the Federal Trade Commission and the
    General Accounting Office to determine the impact of credit card
    use on consumer prices. The study should show whether there is any
    merit to the argument made by those who want to allow surcharges
    that cash customers are subsidizing credit card customers because
    merchants must increase their prices to cover credit card costs.

    Senate Banking Committee Chairman Jake Garn (R Utah) has advised
    that this compromise bill will be acceptable to the Senate, and the
    Senate is expected to pass the bill this week...."

The letter was dated April 11, 1984. 

-- 
		    /dev/shoe
			UUCP:	...!pur-ee!pucc-j:acu
			ARPA:	mas@purdue

djc@sun.uucp (David J. Cardinal) (04/18/84)

When visiting the California wine country last weekend,
we were informed that most vineyards had a "surcharge"
of 2% or 3% for credit card purchases.

When we asked about the "law", we were told that it
was merely "an advisory" and not a "real law".

Does anyone know the scoop on this?

P.S.  I got my post cards from AmEx, but elected not to
      send them in due to the clearly hype (and in my opinion,
      bogus) nature of their reasoning.
      
      It is clear to me that merchants have a cost in dealing
      with credit card companies, and if they want to 
      pass it through, it seems like their right, although
      I enjoy the convenience of a credit card.
      
P.P.S.Do MasterCard and VISA guarantee payment to the merchant
      in the case of non-payment by the consumer?  I have
      a recollection that they didn't used to, but if they
      absorb the float time, etc., it seems that they must
      pay off before the customer does.
      
P.P.P.S.  What, if any, are the surcharges merchants pay
      to credit card companies on credit card purchases
      (or to re-phrase--do they get a full 100% of the amount)?
      
curious--  dave cardinal ({ucbvax|allegra}!sun!djc)

ron@brl-vgr.ARPA (Ron Natalie <ron>) (04/18/84)

According to the letter from American Express.  The previous
law against credit card surcharges has already expired.

-Ron

barryg@sdcrdcf.UUCP (Barry Gold) (04/19/84)

>       Worse still, there is a Chevron station on El Camino Real in San Mateo
>       just south of Hwy 92 (yes, I'm MAD!) that posts "cash" prices on big
>       signs by the road (o.k.), has the pumps charge you credit card or
>       "normal" rates on the meter (still o.k. so far, the little computer
>       in the cash register prints the meter reading on the credit slip and
>       the "cash discount" is rung up separately), BUT...
>
>       ...after dark, this "24 hour" station charges you credit-card rates
>       for cash fill-em-up purchases. (Bogus "cost of security"???) There
>       is NO sign that tells you that. You don't know 'til you go to pay.


My last problem with a major gasoline company was may years ago, but I
just wrote the company (Std. Oil of Calif. in the case of Chevron) and
told them what happened.  They sent me a check for the difference.  They
don't want to see you change brands because of one turkey station.
-- 
	Barry Gold
	usenet:         {decvax!allegra|ihnp4}!sdcrdcf!ucla-s!lcc!barry
	Arpanet:        barry@BNL