Shops charging 1 or 2% for using visa machine in the store

[ubonr1971]

I cant remember exactly where it was but I recently used my visa card inside a retail shop and they charged me a 1 or 2% fee. 

 

We have a small business and recently had a KTC machine installed at our reception. After running the EOD settlement on the machine the next day we were paid the total money less 400 baht for the fees (for the said day). 

 

I want to charge 1% to our customers to cover this fee and our staff said they received negative feedback last week when testing this out. 

 

As a consumer are you put off by having to pay 1% fee to pay by a visa machine in a shop? Would you shop elsewhere to avoid having to pay this fee in the future?

 

If we take the hit on these fees then its going to add up in the long run. Unsure what to do

 

[thonglorjimmy]

I think that by accepting cards and paying a transaction fee the merchant weigh the, pretty minimal, cost against the cost of cash handling and a visit, and risks involved, to their bank to deposit cash.

 

I would expect that any reasonable merchant would have factored in cash handling and bank visits into their pricing structure, as a consumer I wouldn't expect a merchant to add a surcharge to cover the cost of their cash handling, nor would I expect to pay a surcharge for the merchants business model of accepting payment cards.

 

In answer to your question, yes I would be put off paying a surcharge because the merchant decides they like the convienience of accepting cards, I think that is some countries doing so is forbidden by law and in most countries Visa/Mastercard don't allow it.

 

I would of course pay the surcharge, but only once. 

[CharlieH]

I hate "extras" of any description, just give me the damn price and stop trying to milk it, is how I feel.

Businesses offerring low prices making things look good, then add add add, is a real annoyance. Tell it like it is ! give the final price when making a purchase, cost in any charges into that selling price and STOP trying to mislead by advertising one price then add add add at the payment point.

Another example of "charges", because I recently bought some "construction" class materials, I had to pay an additional percent, because I used a card, additional percent, it drives me NUTZ!

 

BE STRAIGHT! the price shoold be the price, not inflated at payment point. (rant over)????

 

 

People use some stores and services because they can use a card and dont want/dont have, to use cash etc.

The merchant gets those customers because he offers that facility, so he should bare the cost, however, business sense dictates that cost is absorbed into the overall cost of the item purchased. DONT make it look like the customer is paying for the privelege of using his card, its wrong and looks like the customer is being stung!

[simoh1490]

As I recall Visa doesn't allow retailers to charge customers for using their cards, even to the point of them being willing to refund any charges made, as long as the customer can provide an invoice to confirm the charge by the retailer (which no retailer will be provide because they know that Visa will give them a slap).

 

Is the same not true of charges made via terminals?

[Berkshire]

People should pay for the option.  If they don't want to pay extra, simply use cash.  Personally, I'd prefer to have that option. 

[CharlieH]

Not sure if its still in force but Paypal used to have a similar policy whereby "fees" were not allowed to be charged to the customer.

 

I like businesses that you only pay whats marked, no extras of any description "All in" then I can take it or leave it and not get wound up by it. Its not the actual amount its the principal and tactics I object to.

[simoh1490]

+1 Reminds me of being in the UK earlier this year and buying plane ticket to Thailand with BA. When the right flight, time and seat had been sorted I was asked if I wanted to take any luggage with me 'cos if so it would cost a further £47 AND a further £47 if I wanted to bring it back on the return flight! I vowed to my god at that moment that I would never fly with BA ever again, again!!

Edited November 27, 2018 by simoh1490

[CharlieH]

11 minutes ago, simoh1490 said:

+1 Reminds me of being in the UK earlier this year and buying plane ticket to Thailand with BA. When the right flight, time and seat had been sorted I was asked if I wanted to take any luggage with me 'cos if so it would cost a further £47 AND a further £47 if I wanted to bring it back on the return flight! I vowed to my god at that moment that I would never fly with BA ever again, again!!

I totally agree! They are following the marketing principles of the budget carriers. Soon it will be extra for food and so on, extra or coin operated toilets !!! Any excuse to drive the initial price (the hook) as low as possible.????

[uwe_rayong]

I'm OK with a CC card fee. It is your choice to use the card (collect points, have insurance for the purchase etc.) or not use the card.

The usage of the card is connected with an additional fee that the seller pays, if he accepts the card.  And Cards like Diners Club or Amex are not cheap for the seller.

With the opinion "please don't charge me on top", you expect anybody to pay for your choice. 

 

With other words, each customer that pays  cash has also to subsidise the customers that use the CC. (cash handling, bank visits etc are all neglible for small businesses, they have to go to the bank anyway).

 

 

That said, since most people tend to only and ever look at this problem from there point of view, factor the CC fee in the selling price. It is better to communicate to the customer.

If you have large customer and you suspect that he is a little bit brighter then the other, you can offer 3% discount for cash payments.

 

CC payments not only charge the fee, you also have the chargeback risk.

 

 

 

 

 

 

[CharlieH]

"CC payments not only charge the fee, you also have the chargeback risk."

 

Which begs another question, why is it some stores/services etc in Thailand will only accept a credit card (fees and chargeback) but WONT accept a debit card ? Why is that ? anyone know ?

[blinkers]

In most of our home countries this merchant cost is factored in to everyday prices, so everyone pays it regardless of card or cash, you could always be a bit different, by factoring in the 1% and offering a 1% discount for cash, lot of messing about either way.

[The Cobra]

Any excuse possible to up the price, terrible practice.

[watcharacters]

 

OP?     Would your 1% charge be upfront so the customer knows about it or would it be a hidden charge.

 

Other than online purchases, I've never used a CC in SouthEastAsia.

[jackdd]

It depends on how you communicate it.

If you have "visa / mastercard" signs without any hint to an extra 1% fee i would be surprised and be not happy. If you just use signs that say "visa / mastercard, 1% fee" it would probably be ok.

 

6 hours ago, CharlieH said:

Which begs another question, why is it some stores/services etc in Thailand will only accept a credit card (fees and chargeback) but WONT accept a debit card ?

Chargebacks and fees are the same for debit and credit cards. I don't know why some places might not accept debit cards, but i've also never seen such a place personally.

[robblok]

I would accept it why should the shop have to pay the fees. If they get cash they don't have to pay the fees.

Its a business choice some people from countries where credit card usage is more normal will be put off others wont.

I often see it in Thailand recently i saw a 3% charge at a hotel on one of the Thai islands.

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[starky]

Is this a new concept?

[BestB]

2 hours ago, The Cobra said:

Any excuse possible to up the price, terrible practice.

Why you expect business to wear the costs?

 

unlike in the west, thai banks charge rather high fees for EDC, 2.9-3.9% per transaction, then also bank withholds transaction tax of about 1%

 

Many shops have limits, like minimum 1000 baht to use a card.

 

[observer90210]

Report the shops that add a levy charge on a credit card to the credit card headquarters. If the Thai office does not seem interested, take up the matter with the world headquarters.

 

But on a personal note, I prefer to always pay cash and get the discount for myself !!????

[JAS21]

The pharmacy just up the road from Ngam Wong Wan Mall in the past charged 3% for CC ... so I paid cash ..not sure if they still do though..

[CharlieH]

9 minutes ago, BestB said:

Why you expect business to wear the costs?

 

unlike in the west, thai banks charge rather high fees for EDC, 2.9-3.9% per transaction, then also bank withholds transaction tax of about 1%

 

Many shops have limits, like minimum 1000 baht to use a card.

 

If you ran a business, and you got the customer because he could pay with his card, would you rather pay the 3% or lose the customer ? (assuming customer value exceeds 1000 baht) ?

[robblok]

If you ran a business, and you got the customer because he could pay with his card, would you rather pay the 3% or lose the customer ? (assuming customer value exceeds 1000 baht) ?

Good question depends on the margin on the products.

I am of the opinion most Europeans understand but Americans don't as credit card use is so prevalent there.



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[BestB]

10 minutes ago, CharlieH said:

If you ran a business, and you got the customer because he could pay with his card, would you rather pay the 3% or lose the customer ? (assuming customer value exceeds 1000 baht) ?

Customer has a choice , can always pay cash or withdraw money from ATM, especially on sale or cheap items 

[CharlieH]

3 minutes ago, robblok said:

Good question depends on the margin on the products.

I am of the opinion most Europeans understand but Americans don't as credit card use is so prevalent there.



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The point being, if the cost was built in to start with, you get the card customer regardless, and the cash payer actually is better profit as you dont pay fees, so its a win win for booth sides.

From a marketing prospective, you "could" even offer a discount for cash and thats a win win too. BUT adding as additional could be lose all round. IMHO

[Pib]

 

Quote

As a consumer are you put off by having to pay 1% fee to pay by a visa machine in a shop? Would you shop elsewhere to avoid having to pay this fee in the future?

Damn straight I would be put-off.  Any merchant that attempts such automatically goes on my "don't do business with them list."   

 

Ditto for those merchants who attempt DCC on every transaction and then give the customer a hard time in reversing the DCC transaction (saying it's too hard) and then rerunning in Thai baht.     

[simoh1490]

36 minutes ago, BestB said:

Customer has a choice , can always pay cash or withdraw money from ATM, especially on sale or cheap items 

Why push the onus back on to the customer to make the choice, this is a merchant charge....the customer can choose another outlet that doesn't levy the charge, the choice is with the retailer to levy the charge and potentially lose the customer or don't levy it and absorb the cost as a part of overheads.

[BestB]

1 minute ago, simoh1490 said:

Why push the onus back on to the customer to make the choice, this is a merchant charge....the customer can choose another outlet that doesn't levy the charge, the choice is with the retailer to levy the charge and potentially lose the customer or don't levy it and absorb the cost as a part of overheads.

Customer has a choice and business also has a choice, simple as that 

[robblok]

1 hour ago, CharlieH said:

The point being, if the cost was built in to start with, you get the card customer regardless, and the cash payer actually is better profit as you dont pay fees, so its a win win for booth sides.

From a marketing prospective, you "could" even offer a discount for cash and thats a win win too. BUT adding as additional could be lose all round. IMHO

Could also be an option of course but it all depends on his business and margins.

 

Anyway I am just not a real credit card user and i almost never see it used with my clients. But that is in Europe not in Thailand so I really don't know how common it is. 

[yankee99]

All i can say is the thai banks charges are very expensive for the merchants. When i inquired with bangkok bank and they wanted 100,000 deposit and 5%. 

[simoh1490]

4 minutes ago, yankee99 said:

All i can say is the thai banks charges are very expensive for the merchants. When i inquired with bangkok bank and they wanted 100,000 deposit and 5%. 

Many retailers in Thailand used to routinely charge an additional 3% for paying by credit card, it was pretty much the norm for a long time as they tried to recoup bank fees.

[DPKANKAN]

19 hours ago, uwe_rayong said:

I'm OK with a CC card fee. It is your choice to use the card (collect points, have insurance for the purchase etc.) or not use the card.

The usage of the card is connected with an additional fee that the seller pays, if he accepts the card.  And Cards like Diners Club or Amex are not cheap for the seller.

With the opinion "please don't charge me on top", you expect anybody to pay for your choice. 

 

With other words, each customer that pays  cash has also to subsidise the customers that use the CC. (cash handling, bank visits etc are all neglible for small businesses, they have to go to the bank anyway).

 

 

That said, since most people tend to only and ever look at this problem from there point of view, factor the CC fee in the selling price. It is better to communicate to the customer.

If you have large customer and you suspect that he is a little bit brighter then the other, you can offer 3% discount for cash payments.

 

CC payments not only charge the fee, you also have the chargeback risk.

 

 

 

 

 

 

Yes but the poster is right. It is not just CC fees some try to charge 2% on my KK visa debit card too!! Sino Thai gold shops all seem to try it!! So it is get stuffed or I will go to an ATM and make them wait!