Credit Card, Debit Card Usage Add 3+ % To Bill To Use Plastic

[cm-happy]

This my pet peeve here. Sometimes using plastic to pay for services or a bill merchant will try to add 3% or more onto the bill just for using plastic. Some merchants do not follow this practice. Usually its the larger, more established ones that do not, Those that do may have a cash flow problem.

What they are doing is passing on to the customer the merchants plastic discount rate.

The discount rate usually 1 or 2 % of gross plastic sales using the same type plastic, ie master card, visa, amex, discover etc. passing this fee onto the customer is expressly forbidden by the plastic company and is clearly stated in the agreement the merchant has to agree to in order to accept that particular type card. the discount then goes to the plastic company for processing and adminstative accounting fees. The merchant is then re imbursed usually at the end of the month into its respective business checking account. This agreement stipulates that if the merchant does pass on the discount fee they will forfit that right to accept the particular type card which they are abusing.

I know of what I speak, having owned several small retail stores in the States that accepted all of the most popular plastic.

This seems to be a problem not only Thailand, but in many surrounding countries.

Have sent MC(my card of choice) an e-mail complaining of this practice here, outling the above rules of use. They assure me that the same rules apply EVERY WHERE, and suggest reporting to them the offending merchant. This is easy to do since the cc receipt has the merchant ID printed on it which is how they are identified not by the business name.

Just wanted to vent 'cause am pissed off about this practice.

Mods, if this is the wrong forum, feel free to move it.

Edited December 6, 2007 by cm-happy

[Furbie]

This my pet peeve here. Sometimes using plastic to pay for services or a bill merchant will try to add 3% or more onto the bill just for using plastic. Some merchants do not follow this practice. Usually its the larger, more established ones that do not, Those that do may have a cash flow problem.

What they are doing is passing on to the customer the merchants plastic discount rate.

The discount rate usually 1 or 2 % of gross plastic sales using the same type plastic, ie master card, visa, amex, discover etc. passing this fee onto the customer is expressly forbidden by the plastic company and is clearly stated in the agreement the merchant has to agree to in order to accept that particular type card. the discount then goes to the plastic company for processing and adminstative accounting fees. The merchant is then re imbursed usually at the end of the month into its respective business checking account. This agreement stipulates that if the merchant does pass on the discount fee they will forfit that right to accept the particular type card which they are abusing.

I know of what I speak, having owned several small retail stores in the States that accepted all of the most popular plastic.

This seems to be a problem not only Thailand, but in many surrounding countries.

Have sent MC(my card of choice) an e-mail complaining of this practice here, outling the above rules of use. They assure me that the same rules apply EVERY WHERE, and suggest reporting to them the offending merchant. This is easy to do since the cc receipt has the merchant ID printed on it which is how they are identified not by the business name.

Just wanted to vent 'cause am pissed off about this practice.

Mods, if this is the wrong forum, feel free to move it.

This is just one of those annoying things in Thailand you will have to learn to live with. When I was a tourist here for the first time, I did manage to get back the 3% add on fee for a purchase I made, but it was a purchase for an item over 2,000 USD, so it made it worthwhile - then of course I had to fight with the CC company about charging me 3% for using the card overseas, which I also got back, d##n US CCs!

However, the problem in Asia itself is so wide spread, that there is a standoff between the CC companies and the businesses - if you notice your receipts from most companies will not say there is a 3% fee on it, it will merely have a total price which will correspond to your CC receipt, so try and prove it. As a result, I only use the credit cards at larger businesses where this is not an issue.

[raslin]

So why use a credit card?

I've lived here 20 years and not needed one.

Want something — pay for it in cash.

No problem.

[Scott]

I seldom use my credit card and when I do I pay the entire thing off so I don't get charged interest, but it's hard to live without one. Have you tried to make a hotel reservation without a credit card? Tried to make an airplane reservation? Etc. Etc..

I use the credit card for these things, but often pay in cash.

We live in one of those worlds where it's getting harder and harder not to get by with plastic.

[shepsel]

When a merchant signs a contract with either Mastercard, Visa, or American Express to accept cards at his/her establishment there is a clause in the contract stating that the merchant cannot add on an extra fee to the consumer for credit card services. If the merchant violates this, and is reported by a consumer about this practice, the merchant can have his contract voided.

A responsible consumer should advise the merchant of this, and then phone or write to customer service at the credit card companies reporting the incident.

[GuestHouse]

When a merchant signs a contract with either Mastercard, Visa, or American Express to accept cards at his/her establishment there is a clause in the contract stating that the merchant cannot add on an extra fee to the consumer for credit card services. If the merchant violates this, and is reported by a consumer about this practice, the merchant can have his contract voided.

A responsible consumer should advise the merchant of this, and then phone or write to customer service at the credit card companies reporting the incident.

Not quite correct.

I did report such a case to Master Card the agent I spoke to said they would check the case, but if the charge is being made to ALL credit cards, not just Master Card then there was nothing they could do about it.

The rule is that all cards must be treated equally - Its about ensuring there are no barriers to doing business with your Credit Card, not about you not being charged

[chanchao]

I very much disagree with the original post.

I have no problem at all with companies charging the percentage back to the customer that they'd otherwise lose on fees from the credit card company.

I also stopped using credit cards by the way, I think the whole model is completely flawed. (Especially also security). And I completely agree with vendors also not taking the credit company's BS.

Actually, if a vendor DOESN'T charge for credit card use then that's a key indicator that he's making too much margin, and I will ask for a discount when paying cash.

In fact, this is also very common when buying something even at bigger stores: "How much discount if I pay cash?" that's exactly the same thing, the only difference is that the small vendor quotes the cash price, the bigger quotes the fluffed up tourist price including credit card penalty. And hence, there's the hidden discount!

[cm-happy]

When a merchant signs a contract with either Mastercard, Visa, or American Express to accept cards at his/her establishment there is a clause in the contract stating that the merchant cannot add on an extra fee to the consumer for credit card services. If the merchant violates this, and is reported by a consumer about this practice, the merchant can have his contract voided.

A responsible consumer should advise the merchant of this, and then phone or write to customer service at the credit card companies reporting the incident.

Not quite correct.

I did report such a case to Master Card the agent I spoke to said they would check the case, but if the charge is being made to ALL credit cards, not just Master Card then there was nothing they could do about it.

The rule is that all cards must be treated equally - Its about ensuring there are no barriers to doing business with your Credit Card, not about you not being charged

You absolutely wrong GH. You are probably talking about additional fees imposed by the cc for currency conversions usually charged by the issuing bank when transactions are in a foreign currency. Several class action suits have been filed and judged that if imposed by ALL cc companies then its ok to do. This has nothing to do with the merchant adding on to cover their discount rate.

[Ricardo]

I believe that the law was changed a few years ago, in the UK, to permit surcharging the fees back to the customer, so it is by no means universal for merchants to pay.

Although most merchants continued to absorb the fees, but not the whopping 5% at Amex (compared to the 2% we paid for Visa/MC), which was why it was hard to find a retailer who accepts it in the UK. Just too greedy !

I believe it is more important, for any such surcharge to be clearly stated, at the point-of-sale, so that the customer knows about it in-advance. You can then decide which method of payment you wish to use.

[BossHogg]

I believe that the law was changed a few years ago, in the UK, to permit surcharging the fees back to the customer, so it is by no means universal for merchants to pay.

Although most merchants continued to absorb the fees, but not the whopping 5% at Amex (compared to the 2% we paid for Visa/MC), which was why it was hard to find a retailer who accepts it in the UK. Just too greedy !

I believe it is more important, for any such surcharge to be clearly stated, at the point-of-sale, so that the customer knows about it in-advance. You can then decide which method of payment you wish to use.

You are correct on all counts. In the uk its perfectly legal and i often come across this practice.And yes Amex do charge the retailer 5%...i just never accepted Amex in any of my stores.

[chanchao]

I believe that the law was changed a few years ago, in the UK, to permit surcharging the fees back to the customer, so it is by no means universal for merchants to pay.

Although most merchants continued to absorb the fees, but not the whopping 5% at Amex (compared to the 2% we paid for Visa/MC), which was why it was hard to find a retailer who accepts it in the UK. Just too greedy !

I believe it is more important, for any such surcharge to be clearly stated, at the point-of-sale, so that the customer knows about it in-advance. You can then decide which method of payment you wish to use.

Makes sense. Some places actually state it, but more common is to inform the customer when he decided to pay by credit card. I don't think it's ever 'just added' as a hidden charge. (Other than hidden in the sale price to begin with for up-market stores, of course.)

[Naam]

Actually, if a vendor DOESN'T charge for credit card use then that's a key indicator that he's making too much margin, and I will ask for a discount when paying cash.

BINGO!

[Naam]

And yes Amex do charge the retailer 5%...

AMEX charges different percentages depending what kind of expenses are involved.

[george]

AMEX Thailand charges 3.25%, Visa & Master 2.75%

[GuestHouse]

When a merchant signs a contract with either Mastercard, Visa, or American Express to accept cards at his/her establishment there is a clause in the contract stating that the merchant cannot add on an extra fee to the consumer for credit card services. If the merchant violates this, and is reported by a consumer about this practice, the merchant can have his contract voided.

A responsible consumer should advise the merchant of this, and then phone or write to customer service at the credit card companies reporting the incident.

Not quite correct.

I did report such a case to Master Card the agent I spoke to said they would check the case, but if the charge is being made to ALL credit cards, not just Master Card then there was nothing they could do about it.

The rule is that all cards must be treated equally - Its about ensuring there are no barriers to doing business with your Credit Card, not about you not being charged

You absolutely wrong GH. You are probably talking about additional fees imposed by the cc for currency conversions usually charged by the issuing bank when transactions are in a foreign currency. Several class action suits have been filed and judged that if imposed by ALL cc companies then its ok to do. This has nothing to do with the merchant adding on to cover their discount rate.

No, I'm absolutely talking about the passing the card charges to the customer - Not the currecy coversion fee.

'Class actions' - like who in Thailand is going to take notice of those?!

[TerryLH]

"You absolutely wrong GH."

Apples and oranges. GuestHouse is talking about a fee being added on by the shop, not a conversion rate.

[naka]

You DO have a choice !

If the markup annoys you ... pay cash.

Naka.

[JetsetBkk]

So why use a credit card?

I've lived here 20 years and not needed one.

Want something — pay for it in cash.

No problem.

Ditto - I have never used a credit card here and all mine have now expired. And anyway, there's too much risk of them being copied.