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

[bubba]

1 hour 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%. 

It’s not just the bank commission chrarged to merchants, which is very high for small businesses. The banks also charge them a monthly rental on their credit card machine. 

 

Providing credit card service costs small family businesses significant money, while they are already operating on a thin margin. I have no problem at all having the option of card or cash, and compensating them for their added cost of providing that service. I think it’s the banks who should be getting the heat in this thread. 

[wcoast]

My Thai experience is typically 2.5-3% fee, from small merchants. It's violates the CC agreement to charge a fee but small businesses can't afford to absorb the cost. So som num nah.

Sent from my abacus using Tapatalk

[owenm]

I have found that most large retailers such as Big C, Tops, Power Buy and Index don't charge u a surcharge for Visa or Mastercard, but many smaller stores do charge additional 2-3% which does cover their additional bank costs.. 

 

One thing I don't like is when Homepro have occasionally charged my purchase in my home currency on the card without asking whether to charge as Thb or AUD, resulting in a poor exchange rate costing up to 5% extra.. Now i insist in being charged in Thb.. 

 

I use a Virgin Velocity multi currency visa card which I usually load up as Thb for purchases to avoid additional exchange rates.. 

Edited November 28, 2018 by owenm
Wasn't finished

[Langsuan Man]

5 minutes ago, owenm said:

One thing I don't like is when Homepro have occasionally charged my purchase in my home currency on the card without asking whether to charge as Thb or AUD, resulting in a poor exchange rate costing up to 5% extra.. Now i insist in being charged in Thb..

Never a problem for me, I always smile and say Thai Baht,  Krap and on the rare occasion when they don't then they do it all over again 

[suzannegoh]

14 hours ago, starky said:

Is this a new concept?

Yes, that's why it's such a mystery what people will think about it.  If he proceeds with that idea he will be the first merchant to charge extra for the use of a credit card.

[bbz404]

Personally, I would suggest for small businesses to increase all the prices to cover for the credit card fees and give a cash rebate for customers paying in cash. This seems to be in compliance with the CC agreements and would allow you to recover the costs.

That being said, I hate it when surcharges are added. In Thailand, I typically see 3% CC fees, which is outrageous. For smaller amounts, it may still be acceptable, but not for larger ones. I wanted to pay the down payment on my HRV with my credit card at a big Honda Dealership. They said, 3% surcharge. For an amount in excess of 350,000 Baht!!! Since all paperwork was done already, I just made a bank transfer instead but was furious and hesitated taking my business elsewhere. Of course, this dealer won't charge this 3% fee on maintenance work done there, only on car purchases, go figure.

[dapperdan]

A restaurant in San Francisco, this summer, refused cash, told me cards or QC via phone only. They just build it in I guess. 

[4MyEgo]

The simple solution to your problem is to raise the cost to your items to cover your 400 baht for the said day x days, because this customer won't be back if you charged me a surcharge, although I must confess, I am talking about a debit card Visa or Mastercard, because I know banks DO NOT charge for debit cards, the problem is most people I have encountered behind a counter cannot differentiate between a debit card or a credit card and when you tell them, they smile, so you have to spell it out, no charge to card, some are thicker than others and those who have dug their feet it have lost my business because they haven't been taught correctly or been told, failed to investigate etc etc and once you lose a customer, he is gone.

 

As for credit card surcharges I am aware this is the norm, however I do not have a credit card because I refuse to pay for an annual fee while the banks charge high interest rates, suffice to say one's own money in the bank being used by one's debit card is King. I also refuse to withdraw funds from any ATM outside of my local town as I believe I shouldn't have to pay a fee for using the same banks ATM fee, which is how it is back in the old country. 

 

 

[4MyEgo]

21 hours 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 with you, however recently booked our overseas tickets for the family (direct flight) and sure enough there was an add on for your seats, 240 baht per head each way, and as if you would think you would need a seat in an aircraft to sit these days....lol, then add 1,000 baht for each 20kg bag, meals, movies, etc, etc, and then when you get to the end, it's another 250 baht per passenger for using your visa debit card, however they get away with it by calling it a processing fee, and as much as that irks me, it still worked out to be 11,660 baht per head cheaper than the bigger players, like Thai, or Qantas, or Emirates, so they bend me over when I allow them so to speak, after all a family of 6 x 11,660 baht savings does add up ????

 

[dlclark97]

I am put off by this practice.  Price marked should be what you pay.  Further, I believe VISA does not allow for extra charges to use the VISA services.  Any or several customers complaining about this to VISA could end up voiding your contract with them.

[Kerryd]

14 hours ago, starky said:

Is this a new concept?

No - it has been around (in some countries at least) for 20+ years.

In some places, especially small shops, they will offer a discount if you pay cash as an incentive to not use a CC (which the shop can not recoup the charges from). I remember one time a few years ago (while I was working in Afghanistan) I was trying to make some (work-related) purchases and needed to use a credit card to pay for them. The retailer didn't accept credit cards at all because, as they didn't do a lot of credit card transactions, they had to pay fees of 3-4% for each transaction. (Retailers that do large amounts of transactions pay fees around 1% or maybe even less, depending on volume and total $ amounts).

As they were a "wholesaler" - they didn't have a large mark-up on their stock and the 3-4% fee would basically mean they wouldn't make anything at all (or even lose money on some things). (I got lucky as a co-worker had a relative near that place who could buy the stuff and ship it, then invoice us from his farming company - got to love networking !)

I'd say the best option would probably be to raise prices just enough to cover the CC charge, then offer a discount to those who pay with cash. That way you aren't losing money and the customer probably won't even notice a tiny price increase like that.

 

[MekkOne]

perfectly fair, they give you a service and you are supposed to pay for it, if you don't like it go to the ATM and pay 220THB fees to get your cash out or, even better, use the card to get a flight and leave.

[DFPhuket]

The addition of a credit card service charge annoys me. If I'm shopping at night, I shouldn't have to pay a surcharge because the lights are on and using more electricity. Nor should there be a surcharge for a customer's use of the toilet. All of these things - and the acceptance of a credit card - are a cost of doing business. 

 

If you really want to go this route, I'd suggest a discount for cash rather than a surcharge for credit cards. But is it really worth it? The advantage of credit cards is that there is less chance that an employee is going to put a few bills in a pocket, fewer trips to the bank to deposit cash, and (assuming your accounting software is decent) easier reconciliation of accounts. 

[Pib]

1 hour ago, owenm said:

 

One thing I don't like is when Homepro have occasionally charged my purchase in my home currency on the card without asking whether to charge as Thb or AUD, resulting in a poor exchange rate costing up to 5% extra.. Now i insist in being charged in Thb.. 

 

Based on my experience with the three HomePro stores I frequent in my Bangkok area, all three will default to using DCC for a foreign card unless you tell them when handing them your card with direct eye contact, "Charge baht, not U.S. Dollars" (or whatever your  home country currency is).  They then happily charge it as baht.   

 

But every once in a while even when telling the checkout clerk to charge Thai baht they still charge in dollars.  When I see the receipt for signature in Thai baht and USD I then know it was a DCC transaction.  I do not sign, tell them to cancel that transaction and rerun as baht.  They happily do it....takes less than 2 minutes to cancel and rerun.   The first transaction usually still shows up on my credit card account in Pending status for a few days and then falls off.

 

And unless something has changed the HomePro DCC rate is 2.75% commission....and then if your card-issuing bank say charges 3% for a foreign transaction then your exchange rate ends up being 5.75% below the Visa/Mastercard exchange rate.   Can't do nothing about the fee your card-issuing bank applies, but a person can about the HomePro (on any Thai merchant) DCC rate/charge.

 

Yeap, based on my experience HomePro defaults to DCC.  Pizza Place and The Villa (grocery store) will also default to DCC unless you tell them charge in baht.  I really don't have a problem with this since these stores do not charge DCC if you tell them not to upfront....but at the same time I think these merchants are just being greedy and I have to actively deflect their greed.

 

Until you find out which merchant may or may not default to DCC with a foreign card, when handing them your card make direct eye contact with the checkout clerk and say "Charge Thai baht not your home country currency."   Has worked for me in 10 years of used of credit cards here in Thailand.

 

I'm sure merchants like this already have card fees built into their pricing just like they have built in pricing for their payroll, rent, electricity, water, insurance, mia noi, etc....etc....etc.    Any merchant that is "hard core" DCC (that is will only use DCC with a foreign card...not like HomePro who will not charge it if you just ask) and/or applies an extra upfront fee of 1 to 3% don't get my business unless I absolutely have to use them which don't occur often.

 

 

 

[suzannegoh]

4 minutes ago, Pib said:

Based on my experience with the three HomePro stores I frequent in my Bangkok area, all three will default to using DCC for a foreign card unless you tell them when handing them your card with direct eye contact, "Charge baht, not U.S. Dollars" (or whatever your  home country currency is).  They then happily charge it as baht.   

 

But every once in a while even when telling the checkout clerk to charge Thai baht they still charge in dollars.  When I see the receipt for signature in Thai baht and USD I then know it was a DCC transaction.  I do not sign, tell them to cancel that transaction and rerun as baht.  They happily do it....takes less than 2 minutes to cancel and rerun.   The first transaction usually still shows up on my credit card account in Pending status for a few days and then falls off.

 

And unless something has changed the HomePro DCC rate is 2.75% commission....and then if your card-issuing bank say charges 3% for a foreign transaction then your exchange rate ends up being 5.75% below the Visa/Mastercard exchange rate.   Can't do nothing about the fee your card-issuing bank applies, but a person can about the HomePro (on any Thai merchant) DCC rate/charge.

 

Yeap, based on my experience HomePro defaults to DCC.  Pizza Place and The Villa (grocery store) will also default to DCC unless you tell them charge in baht.  I really don't have a problem with this since these stores do not charge DCC if you tell them not to upfront....but at the same time I think these merchants are just being greedy and I have to actively deflect their greed.

 

Until you find out which merchant may or may not default to DCC with a foreign card, when handing them your card make direct eye contact with the checkout clerk and say "Charge Thai baht not your home country currency."   Has worked for me in 10 years of used of credit cards here in Thailand.

 

I'm sure merchants like this already have card fees built into their pricing just like they have built in pricing for their payroll, rent, electricity, water, insurance, mia noi, etc....etc....etc.    Any merchant that is "hard core" DCC (that is will only use DCC with a foreign card...not like HomePro who will not charge it if you just ask) and/or applies an extra upfront fee of 1 to 3% don't get my business unless I absolutely have to use them which don't occur often.

 

 

 

Are there any scenarios under which DCC is beneficial to the customer?  On the surface it appears to be nothing short of consumer fraud.  Banks say that DCC is offered for the "convenience of the customer" hoping that the customer isn't astute enough to know that that imaginary "convenience" is costing them an extra 3 to 5%. 

[Pib]

1 minute ago, suzannegoh said:

Are there any scenarios under which DCC is beneficial to the customer?  On the surface it appears to be nothing short of consumer fraud.  Banks say that DCC is offered for the "convenience of the customer" hoping that the customer isn't astute enough to know that that imaginary "convenience" is costing them an extra 3 to 5%. 

I don't know of any.  The only entities that profit off a DCC transaction (at the customer's expense) is the merchant and his local card-processing bank.  By card-processing bank I mean the bank the merchant has his POS rented from....the bank name that appears on the top of the your receipt for signature.

 

Some banks/ATMs attempt the DCC ripoff also....and the vague, misleading wording associated with a DCC transaction which tries to trick the customer into thinking it's a good deal.  Well, it is a good deal but only for the merchant/local bank.

 

 

[DJ54]

They’ve a choice cash or credit card with fee. If I choose to pay by credit card and advised a fee is charged ..... no problem 

[ubonr1971]

1 hour ago, 4MyEgo said:

The simple solution to your problem is to raise the cost to your items to cover your 400 baht for the said day x days, because this customer won't be back if you charged me a surcharge, although I must confess, I am talking about a debit card Visa or Mastercard, because I know banks DO NOT charge for debit cards, the problem is most people I have encountered behind a counter cannot differentiate between a debit card or a credit card and when you tell them, they smile, so you have to spell it out, no charge to card, some are thicker than others and those who have dug their feet it have lost my business because they haven't been taught correctly or been told, failed to investigate etc etc and once you lose a customer, he is gone.

 

As for credit card surcharges I am aware this is the norm, however I do not have a credit card because I refuse to pay for an annual fee while the banks charge high interest rates, suffice to say one's own money in the bank being used by one's debit card is King. I also refuse to withdraw funds from any ATM outside of my local town as I believe I shouldn't have to pay a fee for using the same banks ATM fee, which is how it is back in the old country. 

 

 

you are wrong stating  'because I know banks DO NOT charge for debit cards,'  KTC charge us 0.55% for debit card useage. Please dont make me send a screen shot of the fees as I cant be bothered. 

[direction BANGKOK]

My understanding is it is pretty much understood customers spend more money with credit cards. As a business, you invest in this ability to use them. You can pass that cost directly to the customer on their invoice, but that is tacky at best and illegal at worst. And, as discussed, it is an advantage for the business. Why would the customer need to pay for a method of payment that makes you more money? But sure, tally it up in your cost of doing business and charge accordingly, but invoicing with a 3% charge is a borderline  ridiculous business practice in my opinion. If you want the real answer just ask yourself what all the smart money does. Does amazon charge you a 3% fee when uou use a credit card? 

[suzannegoh]

 

22 minutes ago, suzannegoh said:

Are there any scenarios under which DCC is beneficial to the customer?  On the surface it appears to be nothing short of consumer fraud.  Banks say that DCC is offered for the "convenience of the customer" hoping that the customer isn't astute enough to know that that imaginary "convenience" is costing them an extra 3 to 5%. 

 

15 minutes ago, Pib said:

I don't know of any.  The only entities that profit off a DCC transaction (at the customer's expense) is the merchant and his local card-processing bank.  By card-processing bank I mean the bank the merchant has his POS rented from....the bank name that appears on the top of the your receipt for signature.

 

Some banks/ATMs attempt the DCC ripoff also....and the vague, misleading wording associated with a DCC transaction which tries to trick the customer into thinking it's a good deal.  Well, it is a good deal but only for the merchant/local bank.

 

 

Visa just announced that they will start allowing DCC to be used at ATM machines in the US.  If it’s pure ripoff I wonder why regulators allow it.  But in the case of DCC in the US I wondered if there might be some cases where it isn’t a ripoff.  For example, maybe the DCC is allowing non-US card holders to avoid absorbent foreign transaction fees being imposed by the foreign bank who issued the card.

Edited November 28, 2018 by suzannegoh

[4MyEgo]

11 minutes ago, ubonr1971 said:

you are wrong stating  'because I know banks DO NOT charge for debit cards,'  KTC charge us 0.55% for debit card useage. Please dont make me send a screen shot of the fees as I cant be bothered. 

I am only going off what I have been told by bank staff at, at least 4 banks and what others have also said on TVF, no screen shot required as I will take your word for it.

 

Visa debit and Mastercard debit do not allow add on charges to customers cards, what and if they charge you is another thing.

 

If the whole thing is getting to you, do what a mate of mine does back in Sydney, he has a very successful and very busy restaurant, and the signs everywhere say, CASH ONLY and I was there one day when a customer said why don't you have card facilities for your customers, and his reply was, because I am a cash only business sir, and I thank you for your patronage....slam dunk !

[shaurene]

It is getting quite common around the world. The store gets charged the fee. American Express can charge up to 3+% to the retailer. Visa, I believe charges the lowest.

Many retailers charge the customers. I am from New Zealand and one of the largest travel agents Flight Centre charge customers 2-3% if they pay by  credit cards. If you complain they just act like Take it or leave it.

[1FinickyOne]

With a cash only business, you will lose the people who live by credit/debit card alone... 

 

For me, the cost of plastic was just a cost of doing business today... like paying for electric... except optional... but not really as 50% or more of my customers paid in plastic... 

[fak119]

23 hours ago, Berkshire said:

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. 

Strange view of business practices you have...

Merchants, restaurants, etc. accept credit cards, because:

1) The customer often buys/consumes more or more expensive goods  and

2) Will come back if good service is rendered

3) No-Cash means less risk

 

A store that cannot calculate the possible fee for credit card transactions will soon be out of business...

[alex8912]

1 hour ago, 4MyEgo said:

I am only going off what I have been told by bank staff at, at least 4 banks and what others have also said on TVF, no screen shot required as I will take your word for it.

 

Visa debit and Mastercard debit do not allow add on charges to customers cards, what and if they charge you is another thing.

 

If the whole thing is getting to you, do what a mate of mine does back in Sydney, he has a very successful and very busy restaurant, and the signs everywhere say, CASH ONLY and I was there one day when a customer said why don't you have card facilities for your customers, and his reply was, because I am a cash only business sir, and I thank you for your patronage....slam dunk !

Without a doubt he losses many sales for this practice AND he has negative reviews and he can’t ever know how many customers do not visit because of this. Your average Western customer under 35 ish carriers no cash on them ( in the West especially in their own country) and they are not going to run to an ATM. This cash only option is stupid. 

[Formaleins]

Think yourself lucky, they normally charge 5%

[AjarnMartin]

You’re lucky. Here in Thailand I have been faced with having to pay THREE PER CENT for some things. The last occasion was when buying prescription glasses from one of the biggest high street suppliers. I said, “No thank you!” And walked out the shop. They ran after me and told me there would be no additional charge. I accepted!

[thaibry]

Payment surcharge! Try using air Asia without paying a hefty surcharge.l.

Sent from my ASUS_X00HD using Tapatalk

[jimn]

On 11/27/2018 at 12:12 PM, CharlieH said:

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.????

Unfortunately you are both not quite right about BA although I agree they are changing. I always fly BA so I know about their pricing structure. Earlier this year BA introduced a 2 band economy pricing. Basic Economy and Standard Economy. They reduced the price of the Basic Econoomy to reduce the cost of baggage. So simo1490 was quoted the nofrills price not the standard price that was there before. 

[Pib]

2 hours ago, suzannegoh said:

Visa just announced that they will start allowing DCC to be used at ATM machines in the US.  If it’s pure ripoff I wonder why regulators allow it.  But in the case of DCC in the US I wondered if there might be some cases where it isn’t a ripoff.  For example, maybe the DCC is allowing non-US card holders to avoid absorbent foreign transaction fees being imposed by the foreign bank who issued the card.

What this is driven by is banks wanting to be able to offer their own exchange rate versus having to use the card-network (Visa, Mastercard, AmEx, etc) rate.   And typically govt regulators/competition agencies have supported this from a "pure competition" standpoint; not from a standpoint of will it actually result in lower costs to the consumer.   Competition does not always mean lower costs to the consumer.

 

It varies from country to country as to if DCC is allowed.  Visa, Mastercard, etc., have resisted it wherever and whenever they can but have been slowly loosing the battle to the banksters and certain govt agencies who want to be able to use DCC whenever and when ever they like.

 

Here's a link talking Visa to allow DCC worldwide

https://www.finextra.com/pressarticle/75645/visa-to-allow-dynamic-currency-conversion-at-atms-worldwide

 

Now banks who can or support DCC "spin" DCC as a great thing for the consumer as there is exchange rate competition, allows more flexibility in fees, etc...just "spin" that misleads the customer....trying to make the customer think it's good for the customer which it's not "unless the bank offers a higher exchange rate than the card-network."   

 

As anyone knows from a DCC transaction hitting their account even if their card-issuing bank does not charge a foreign transaction fee the DCC rate is usually around 3% lower than the card-network rate.  I'm still waiting for anyone to identify a DCC exchange rate that is better than the card-network rate.

 

And just because a DCC transaction occurs where the merchant charges you in your card's currency (i.e., USD, GBP, EUR, etc), that does not mean your card-issuing bank will not also charge you whatever foreign currency transaction fee they may apply.  It's like getting charged twice.  Some people think if they accept a DCC then that means their card-issuing bank will not charge a foreign transaction fee.....that thinking is sometimes dead wrong as many banks still apply their foreign transaction fee simply because it was a foreign transaction in whatever currency.  This policy depends on the card-issuing bank.

 

For example, Bank of America offers a dizzying array of cards with different fee structures.  Some cards do not charge a foreign transaction fee; others do.  But for the ones that do, below is a cut and paste from their fee schedule....notice the foreign transaction fee is applied whether the charge is made in foreign currency (e.g., Thai baht) or DCC was used generating a USD charge.   Bottom line if the transaction occurred in a foreign countries, regardless of whether it was a DCC tansaction or not, BoA will charge a foreign transaction fee on some of their cards.

 

 • Foreign Transaction

3% of the U.S. dollar amount of each transaction (1) made in a foreign currency, or (2) made in U.S. dollars if the transaction is made or processed outside of the United States. This fee will be in addition to any other applicable fee.