My car repair company has boldly put up a notice on the cash counter "all payments by credit card will be charged 2.5% extra." Both Mastercard/ Visa and the issuing banks might claim this charge is illegal. Can they come out with clear cut procedures on how a consumer should confront such situations or a website-id where such com- plaints can be recorded. Meanwhile, the wrong- doers continue to make hay.
Number of boarders reacted to Rediff query on the topic. Almost everyone reported paying TC. Rediff must clarify 'Whether colection of TC by Banks/ (POS) / merchants are leagal or not? Rediff should also suggest some solution.
I have paid transaction fee for electronics and jewellery, but usually refuse to pay for anything else. One supermarket kept charging 1.5 per cent for groceries and cosmetics. I finally complained to the bank and they recovered the amount and made the supermarket pay it back to me. I usually buy fuel through credit cards which reimburse the 2.5 per cent fuel surcharge or don't charge it at all.
Most of electronic showrooms charges 2 - 2.5%. But I have never given this surcharge on Restraurants, apparels, books, Hospital bills, buying watch, etc. In fact they have never asked for it. But I was managed to purchase a Washing Machine without paying this surcharge too. But online railway ticket booking also attracts a surcharge of 1.8% in most cards. But I have not seen any such charge on online flight booking. Petrop pumps also charge this if your card is has not tied-up with any such petrolium industry.
I am a merchant myself and also a credit card holder,so I know both sides of the story. When ever we visit a an electronic showroom for eg to buy an electronic gadget like tv, cd player ,mobile etc. the shopkeepers margins are too low and in many cases as low as 1% ,whenever he swipes a customers credit card, 1.5% to 2 % is deducted by the bank from the bill amount, so if he doesnt charge this extra amount how will he make any profit. But in many cases like restaurants, hotel, and place where the margins are very high as high as 50% in most cases they dont charge in extra,but some greedy merchant dont want to leave that 2% from their own pocket. There should be a mutual understanding between the customer and the merchant,some have to charge extra and some can do even without charging extra 2% on the amount swiped.
RE:Charging 2% is reasonable and justified in many outlets
by Smart Fool on Nov 26, 2007 10:43 AM Permalink
If the consumer pays by credit/debit card or cheque, the money is in the records and the merchants have to pay tax and there is no way they can avoid for a transaction paid by credit/debit card or cheque. If the consumer pays it by cash, the merchants have the flexibility to manipulate the exact amount they show for that transaction. This was the merchant can avoid paying tax completely or partially. Obviously the merchant cannot say this hidden agenda to the consumer. So they indirectly make the consumer pay by cash by saying that there will be additional some % charge if paid by credit/debit card or cheque.
RE:Charging 2% is reasonable and justified in many outlets
by Smart Fool on Nov 26, 2007 10:41 AM Permalink
One more thing most retailers like cash transaction is to avoid paying tax. If it is paid through CC or Cheque, they cannot avoid tax. So they scare away the consumer by saying that they will charge 2% extra is paid by CC so that indirectly they force the customer to pay by cash and inturn save on tax.
I limit use of my credit card for purchase of air/rail tickets and online payment. Haven't noticed transaction fee in my statements (may be they include it in the overall cost itself). But I do not mind as I get a bit of cash-back which ensures I never pay more than the actuals.
RE:transaction fee
by Abhisek on Nov 25, 2007 04:56 PM Permalink
which credit card are you using? which one give the cash back. buying ticket in credit card cost more than internet banking.please inform.
I have not paid extra money as tranasction fees when ever I have shopped. Only in Wockhardt hospital and other hospitals and in jwellery shops I have paid extra 2%. I have reduced using the card in hospitals and other places where they charge 2% extra as card charges.
charges for payment thr credit cards are understandable as it is a part of service fee the esablishemnt has to pay his banker/ credit card company .. i feel that it must be 1 % only as plastic money has come to stay and the establishment recovers its cost even withis fee
why do credit card co. charge a hefty 1.5% to 2.5% transaction fees from sellers.i know of an instance when i purchased an lowcost airticket from a travel agent for Rs. 2500/- , he asked for 2 % extra transaction fee, on my reluctance to pay the transaction fee,he showed me the calculation that he had recieved Rs.5% of basic fare i.e., Rs.1200/- coming to Rs.60/- as commission & he had to pay Rs.50 i.e.2% of Rs.2500/- as transaction fee , finally left behind with just Rs.10 . I think he was justified in charging transaction fee from me when he had very low margin.
Profit margin day by day decreasing...even credit card co. should charge smaller percentage. Credit card consumers should not forget the lucrative gifts given by card cos. are paid out of this transaction fee. Which in turn is forced on traders & finally consumers bears the brunt.
