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.
