WASHINGTON – The Washington Post highlighted earlier this
week the rising popularity among retailers of offering cash discounts to their
customers.
Following new rules that went into effect earlier this year,
business are allowed to tack on up to 4% on credit card transactions, as long
as they share their intentions with the credit card companies and display
signage communicating the policy to their customers.
“Retailers offer cash discounts because they want to reward
customers for taking [transaction] costs out of the system,” said Jeff Lenard, vice
president of industry advocacy for NACS. “But the challenge is, do people even
carry cash anymore? It’s uncommon that they do.”
Ten states have banned credit card surcharges, while eight
are considering similar legislation.
“To be honest, we’re not seeing very many merchants do this
just yet,” said Trish Wexler, a spokeswoman for the Electronic Payments
Coalition. “It’s something that generally takes a few years to go into effect.”
Wexler said it took several years for Australia to enter
surcharge territory, where they proceeded cautiously.
“We saw it evolve gradually — one airline would try it and
see if they could pull it off,” she said. “And then you’d see all the other
airlines start to do it, too. Then hotels, and so on.”
Wexler said gas stations have been enthusiastic about
encouraging cash purchases, because it generates traffic flow, especially
inside the store.
“As soon as [customers] step foot inside, there’s a chance
they’ll decide to pick up some gum or that six-pack of beer,” she said.
“Anything that gets customers into the convenience stores helps.”
Some retailers are balking at the two-tiered price
structure.
“In today’s world, accepting credit cards is just a part of
doing business,” said Cheryl Harrington, the owner of Shortcake Bakery in
Hyattsville. “Yes, we pay a fee, but we wouldn’t pass that on to the customer.”
Meanwhile, at least one card company maintains the disparate
pricing hurts consumers.
“We believe [surcharging]
is harmful to consumers,” said Sanette Chao, a spokeswoman for American
Express. “It is not a customer-friendly practice for a merchant to attract a
customer to its store or website to shop, and then to penalize the customer
for using a card that the merchant accepts.”