Most of the undustires do not charge transaction fees, be it garment stores, hotels and restaurants, Airlines, hospitals,.
However some of the industries where the margin is low like
Travel Agencies (they earn 5%, discount by 4% and get a profit of only 1%, if they absorb the transaction fee of 2.5%, they will go in a loss)
Petrol Pumps (they only get less than 1%, if they absorb the transaction fee of 2.5%, they will go in a loss)
Consumerism has become so rampant that exploiting businesses has become the sole contention of buyers. If retail businesses fail, t will have a wave effect on employment and affluance of consumers, just like subprime in US has an effect on Indian Stock exchanges.
This is complex economy structure, which i have no time to explain at this hour.
RE:This article is baseless
by Smart Fool on Nov 26, 2007 10:42 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:This article is baseless
by ravi prakash on Nov 26, 2007 09:52 AM Permalink
Many upmarket establishments do not charge a transaction fee because this cost is loaded in the price to the customer. There are other merchants, operating at low margins and believing in cash purchases.These people charge a transaction fee on purchases by credit cards. They keep the card swapping machine mainly to attract prospective buyers of large value purchases. The transaction fee is thus waived if a large amt purchaser objects to it and charged to the small value purchaser of low value items to force cash purchases. The transaction fee is thus used in a discriminatory manner by some merchant establishments. If a customer persists then these merchants also say that they do not accept so and so credit card; etc. Such a practice was common with the older Diners Card. It is for the buyer to decide whether to patronise such establishments or not. In the meanwhile the credit card companies can make a list of those who charge transaction charges and make public announcements in the name of fair business practices. Singapore tourism regularly publishes lists of shops who overcharge their customers or avoid paying sales tax or sell cheap and unreliable goods or indulge in discriminatory practices.
