Merchants Swipe at Card Processing Fees


Irked merchants are offering discounts to cash customers as a way to avoid paying higher processing fees, even if that means losing out on the same percentage of profit.  Can anyone blame them?  – BJK

Merchants Swipe at Credit Card Processing fees in Los AngelesBOSTON, MA – Some merchants are offering their customers discounts for purchases made with cash to offset the high costs of card fees, reports the Boston Globe.

Diane Chung, co-owner of Gari Japanese Restaurant in Brookline, launched a “Maki Madness” promotion, offering as much as 55 percent off select maki rolls for cash-paying customers (credit and debit card customers pay full price).

“We’re like, ‘why are we giving that money to the credit card companies? They’re like loan sharks,’” Chung said. “Give it back to the customer and everyone’s happy.”

Business owners have been increasingly upset at interchange “swipe” fees that card issuers are unwilling to negotiate. Some have adopted tactics like Chung’s, while others have begun refusing credit cards — at the risk of losing customers.

The fight is being waged now on Capitol Hill, where some legislators are proposing oversight by the Federal Trade Commission, to better serve consumers.

“Transaction costs [for merchants] have been creeping up steadily,” said U.S. Rep. Peter Welch (D-VT). “This is an essential service for our businesses…they should be paying a fair price and not get hammered.”

While NACS and business groups strongly support credit card interchange fee reform, detractors claim that merchants would not lower their prices if interchange fees were decreased.