Paying With Cash Could Soon Pay Off

June 15th, 2009

The People vs. Credit Card Company X…

When you buy something with a credit card, the retailer generally owes the credit-card company 1.5-2% (or more depending on the card) of the purchase price. Many retailers pass that cost onto their customers in the form of a 1.5%-2% price increase.
But since there’s only one purchase price, customers paying in cash are actually paying more than they have to since the price includes a fee the retailers aren’t paying on that transaction.
The U.S. Senate is trying to pass new legislation that would change that, allowing retailers to charge less for using cash. But retailer/credit card company contracts could get in the way.

To abide by their contracts and offer price discounts, retailers would have to post two prices on each product, and the credit card price would have to be larger.
The legislation would allow discounts for cash, checks, and debit cards.

“Cash customers pay a penalty because we take credit cards.” – Jeff Miller, President of Miller Oil Co.