Should the government prohibit Credit Card surcharges?

[Sunny]

Re: Public consultation on credit card surcharges

I buy fuel every week with my credit card. I often wonder how on earth the credit card company ends up with almost the same margin on a €50 petrol transaction as the retailer gets. I also wonder why the guy who pays with a €50 note instead of a credit card doesn't get some sort of incentive for paying in cash, as the retailers margin on the cash transaction will be much higher. Is the guy with the €50 note effectively subsidising me?

But thats not your concern. As you stated above the petrol station has decided that commercially it needs to offer the facility to pay by credit card as it might offer a competitive advantage over ones that don't offer it. If the retailer is worried about the size of the margin that he is getting compared to cash, they are free to just accept cash and not credit cards. However, they know they will probably make more sales by accepting credit cards. And as also mentioned above in another post, handling cash incurs its own costs. Why aren't these passed on the consumer in the form of a surcharge?

 

[Jethro Tull]

Re: Public consultation on credit card surcharges

Taking Ryanair as an example I have no option but to use my credit card as they do not accept laser from Ireland (they'd make less money from sneaky charges if they did I suppose). How in god's name is it fair that I am charged a surcharge for using the only method the company has given me to pay?

 

[ClubMan]

Re: Public consultation on credit card surcharges

There are other airlines.

 

[ubiquitous]

Re: Public consultation on credit card surcharges

And as also mentioned above in another post, handling cash incurs its own costs. Why aren't these passed on the consumer in the form of a surcharge?

Good point. If a business such as a travel agent was to introduce a policy that there would be a €x "cash handling fee" every time someone decided to pay for their holiday with cash, would you support this?

 

[Jethro Tull]

Re: Public consultation on credit card surcharges

There are other airlines.

I'm talking about the principle of the matter from a consumer affairs point of view. This is an unavoidable charge if an irish person is booking so should be part of the fare.

They're not the only ones doing it either, just picked them as an example.

Considering that airlines are meant to advertise fares inclusive of taxes and charges now (has this legislaton become law or is it still only in the pipeline) how do are lingus get away with charging an unadvertised 6 euro booking fee?

 

[Sunny]

Re: Public consultation on credit card surcharges

Good point. If a business such as a travel agent was to introduce a policy that there would be a €x "cash handling fee" every time someone decided to pay for their holiday with cash, would you support this?

No. Just like I don't support a travel agent saying that there is a €x "credit card fee" everytime I didn't feel comfortable carrying anything up to thousands of euro of cash down to my local travel agent and so paid by credit card.

But if they are going to have credit card surcharges, not why cash surcharges? Both are absurd but there is no difference between the two.

 

[Jethro Tull]

Re: Public consultation on credit card surcharges

But if they are going to have credit card surcharges, not why cash surcharges? Both are absurd but there is no difference between the two.

agreed. consumers are being charged to pay for a companies CC fees but not cash handling fees, why is this?

 

[ClubMan]

Re: Public consultation on credit card surcharges

I'm talking about the principle of the matter from a consumer affairs point of view. This is an unavoidable charge if an irish person is booking so should be part of the fare.

So everybody - even those who would otherwise/previously have paid a lower or no surcharge - should be hit with the same (presumably higher) charge?

Considering that airlines are meant to advertise fares inclusive of taxes and charges now (has this legislaton become law or is it still only in the pipeline) how do are lingus get away with charging an unadvertised 6 euro booking fee?

Don't think that any legislation on this has come into force yet. See here.

 

[Jethro Tull]

Re: Public consultation on credit card surcharges

So everybody - even those who would otherwise/previously have paid a lower or no surcharge - should be hit with the same (presumably higher) charge?

if you are booking from Ireland there is no other way of NOT paying it. hence its not really a surcharge but a fee that applies to ALL Irish based customers.

 

[ClubMan]

Re: Public consultation on credit card surcharges

if you are booking from Ireland there is no other way of NOT paying it. hence its not really a surcharge but a fee that applies to ALL Irish based customers.

VISA Electron cards attract no surcharge. Aren't they available in Ireland - e.g. see [broken link removed]?

 

[ubiquitous]

Re: Public consultation on credit card surcharges

The policy makers and the public at large don't seem to have any problem with the plastic bag surcharge aka levy. What's the difference between that and a plastic card surcharge?

 

[Sunny]

Re: Public consultation on credit card surcharges

The policy makers and the public at large don't seem to have any problem with the plastic bag surcharge aka levy. What's the difference between that and a plastic card surcharge?

Because its like a tax. When the retailer charges me the 15c or whatever it is, I know this money is being paid in full to the government so the retailer is not getting a hidden margin. The same can not be said for credit card surcharges. Ryanair will never convince me that they were charged the 7.47% surcharge by the credit card company that they charged me to process my transaction. (unless they can me show that they were!)

Businesses who complain about the cost of accepting credit cards should either accept that it is a cost of doing business like ESB, Wages, Security etc or not offer the facility to pay by credit card. They have the choice to 'walk away' from the system. Why should we pay more bcause of their decision not to???

 

[Jethro Tull]

Re: Public consultation on credit card surcharges

VISA Electron cards attract no surcharge. Aren't they available in Ireland - e.g. see [broken link removed]?

Fair enough, I was told on boards.ie that Visa electron was not available in ireland.

However my guess would be that 95%+ of bookings are made via conventional Visas/mastercards. And in any case the fee can often amount 20-30% of the fare if you buy during a sale.

In any case I can't imagine many consumers going to the hassle of buying a gift card every time they want to book a flight.

 

[pat127]

Re: Public consultation on credit card surcharges

I buy fuel every week with my credit card. I often wonder how on earth the credit card company ends up with almost the same margin on a €50 petrol transaction as the retailer gets. I also wonder why the guy who pays with a €50 note instead of a credit card doesn't get some sort of incentive for paying in cash, as the retailers margin on the cash transaction will be much higher. Is the guy with the €50 note effectively subsidising me?

Interesting point! As the retailer’s overall banking charges are reflected in the price he charges the customer then the credit card user takes his share of them before paying the surcharge. One hopes that the retailer keeps his credit card charges out of the general pot but even if he doesn’t the credit card customer is still paying a share of the cash, cheque and other such charges. Discrimination or what? That sounds to me like the credit card user should demand a discount!

Can anyone actually set out the actual charges for different types of payment instruments, even if on a relative basis (e.g. if it costs x to process a cheque it takes y times x to process something else)? It was always my understanding that cash is the most expensive to handle and electronic transactions the least but I remain baffled by Brendan’s statements in the IT article when he writes “So why does a business offer a discount for paying in cash? It’s simply because it costs them less”. He goes on elsewhere in the context of using direct debits to write “It is very expensive to process cheques and cash”. Am I missing something?

 

[z103]

Re: Public consultation on credit card surcharges

but I remain baffled by Brendan’s statements in the IT article when he writes “So why does a business offer a discount for paying in cash? It’s simply because it costs them less”. He goes on elsewhere in the context of using direct debits to write “It is very expensive to process cheques and cash”. Am I missing something?

If a business gets paid in cash, they have use of the money straight away. It's good for cashflow. If they get paid with a cheque, they have to wait for it to clear (if it clears). With credit cards, they still have to wait for funds to clear, and also have to pay the card processing company a fee.

For our company, the order of preference is like this;
1. Cash
2. Cheque
3. Credit card

For convenience, (administration) it's like this;
1. Credit card
2. Cash
3. Cheque.

 

[pat127]

Re: Public consultation on credit card surcharges

If a business gets paid in cash, they have use of the money straight away. It's good for cashflow. If they get paid with a cheque, they have to wait for it to clear (if it clears). With credit cards, they still have to wait for funds to clear, and also have to pay the card processing company a fee.

For our company, the order of preference is like this;
1. Cash
2. Cheque
3. Credit card

For convenience, (administration) it's like this;
1. Credit card
2. Cash
3. Cheque.

Thanks for a clear explanation, Leghorn.

 

[Brendan Burgess]

Re: Credit card surcharges consultation - closes today Friday 7th

I have submitted this thread and the earlier thread on directski.com's surcharge to the Minister.

The debate has been excellent.

Brendan

 

[Brendan Burgess]

A good job that they did not ban Credit Card surcharges. They wouldn't be able to charge those paying the LPT the extra bit.

Brendan