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Charging customer for Discover Card fees?

Discussion in 'Picture Framing Business Issues' started by njw1224, Dec 9, 2018.

  1. njw1224

    njw1224 CGF, Certified Grumble Framer

    I just had a customer tell me a surprising story (or maybe I'm just naive and it's normal). They bought something expensive at a local small business - the cost was about $2900, and they put it on their discover card. Of course the charge showed up on that month's statement. The next month they saw another charge for about $95 or so from the same business. When they called the business to ask what the charge was for, they were told that because the business pays a higher fee to discover, they charge their customers a separate fee for discover purchases. I don't have a discover card, and honestly don't have many customers use it for purchases. So for those of you more familiar with discover transactions, is this normal? Do you charge a separate fee? I hadn't heard of such a thing until now. I didn't know it was legal to pass on any merchant fees to the customer, especially as a separate charge a month later that the customer didn't sign off on.
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  2. shayla

    shayla WOW Framer

  3. DVieau2

    DVieau2 PFG, Picture Framing God

    10 years ago I paid an extra fee for Discover, American Express and reward cards.

    That ended about 5 years ago when I went to square.

    In today's bankcard processing marketplace there are several options where you pay a single and lower than ever fee.

    Here is how you become a master shrewd negotiator. Call your processor and utter the word "square."
    Then sit back and watch them fumble around, call management and present you with a new option.
  4. tedh

    tedh PFG, Picture Framing God

    Don't know what applies in the USA, but up here, Square will not take debit cards. And most everyone in Canada uses debit.
  5. Frances M.

    Frances M. CGF II, Certified Grumble Framer Level 2

    I use my debit card as credit because I can't seem to remember my pin number. Is that not done in Canada?
  6. CB Art & Framing

    CB Art & Framing SGF, Supreme Grumble Framer

    It used to be illegal for s business to do that. Not sure about these days
  7. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    Back to the original post. The charge is fraudulent if not authorized by the customer as part of the original transaction. I would have given the merchant one chance to promptly remove the charge. If its not done, I would dispute the charge and probably discuss it with the DA.
  8. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    ...not to mention how monumentally bad P.R. that is.
    I've never heard of higher rates for Discover processing. We used to have a higher rate on AmEx cards, but not amymore.
    As Doug said: In today's bankcard processing marketplace there are several options where you pay a single and lower than ever fee. We use Elavon, through our bank, and pay what amounts to about .0232, including all transaction and other fees, taking all types of cards.
    :cool: Rick
    shayla likes this.
  9. bruce papier

    bruce papier MGF, Master Grumble Framer

    I'm pretty sure (at least in Indiana) it's legal to charge a fee for credit card use. Our fees for Discover used to be higher than other cards because they were the first to have 1% in reward points or cash back. The 1% had to come from somewhere and it wasn't coming out of Discover's pocket.
  10. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    It's now (the last couple years?) legal to charge a fee for CC use anywhere in the US. However, it must be disclosed and accepted by the customer at the time of sale. It cannot be back charged after the customer has left.

    As for Discover costing more, as you imply, that's no longer the case in many instances. For instance Amex (which also used to be considerably more than "regular" cards) or any of the V/MC Award type cards.
    shayla likes this.
  11. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    I think there are certain particular card types (such as business debit) that have slightly higher rates, but it all sort of evens out with the lower Amex fees etc. The rate I quoted above is all-inclusive of fees and discounts on all types of cards combined.
    :cool: Rick
  12. Dave

    Dave SPFG, Supreme Picture Framing God

    When I first started taking Discover Cards they said they would match any rate we were quoted on VISA or MasterCharge programs. This was 20 years ago though.
  13. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    It doesn't matter if the fees for a card are higher or lower. It doesn't legally matter if you want to charge the customer more or less for certain cards as long as you tell them up front. [The customer may not like it, but that is a different consideration]

    If they are going to charge you after the fact - that is what is wrong. That is fraudulent.
    shayla and Jim Miller like this.
  14. MitchelC

    MitchelC MGF, Master Grumble Framer

    I quit accepting credit cards about 4 years ago and still do not regret it!
  15. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    Really? Cash/check only? Those represent a microscopic portion of our receipts anymore.
    How do you do that? I thought the name of the game was to make it as easy and convenient as possible for people to do business with you.
    :cool: Rick
    Jim Miller and Dave like this.
  16. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    We do roughly 90% B2B, and STILL nearly half our sales are CC. Ain't no way I'm going to cash/check only. CCs are 'cost of doing business" and pricing accounts for it.
    Jim Miller likes this.
  17. Ylva

    Ylva SPFG, Supreme Picture Framing God

    Why? I mean, why not raise your price a little and accept credit cards?

    You might think it makes no difference, trust me, it does.

    I used to go to what I found, the best hair salon in town. Great cuts, price compatible to others.
    However, they did not accept credit cards.
    I don’t carry checks with me anymore.
    I don’t carry much cash.
    I found it very inconvenient to always remember to get cash first, and also never knowing how much it was going to cost me.
    I stopped going there, despite the fact of the great haircuts and the friendly amazing people.

    They are no longer in business, so I guess I wasn’t the only one thinking like that. This was a long-standing business, well known, well liked.
  18. framah

    framah PFG, Picture Framing God

    At this point, my business is over 98% credit card and a few checks and every one in a while, actual cash..very rare indeed!

    To not take credit cards is to shoot yourself in the foot.

    Notice the person in front of you in line at DD and they hold up their phone and the business scans it..... for a lowsy cup of coffee!!! They aren't carrying enough cash to pay for a cup of coffee!!
    Kirstie likes this.
  19. Larry Peterson

    Larry Peterson PFG, Picture Framing God

    Cash. What be this thing called cash?

    The only thing I use cash for is to pay my cleaning lady every two weeks, for my poker buy-ins and to to tip the waitress when I am playing poker. I go to the ATM every couple of months to reload cleaning lady money.

    There are a couple of restaurants here that don't take cards. They don't get my business. I keep a single Hamilton in my wallet. I think he has been lonely in there for at least 6 months.
  20. Al B

    Al B CGF, Certified Grumble Framer

    Mitchel - I know we are outnumbered - Since the beginning of credit cards, we have never taken a credit card. Cash or check and that has been fine for the past seventy years. Customers are reminded of that when they drop off their order and when they are called for pick-up. I do not feel we have ever lost a framing customer because of it.
  21. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    The local gas/convenience store in town lost their CC processing for at least part of the day yesterday. It would be very interesting to know how much business they lost.
  22. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    hard to know, but you would lose me

    the key is to make it as easy as possible for the consumer
  23. cjmst3k

    cjmst3k SGF, Supreme Grumble Framer

    I only accept quarters.

    I've never been a fan of credit cards, pennies, dimes, nickels nor "folding money". Never once lost a customer.
    FramerCat, echavez123, shayla and 2 others like this.
  24. Larry Peterson

    Larry Peterson PFG, Picture Framing God

    A question for those of you that are cash only: what about those customers that don't have the cash available and needs to charge it?

    What do you do? Layaway? Lose the Sale? Something else?

    You all have to had big ticket items where the CX didn't have enough in their checking account to pay it all at once.
  25. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    does that mean you are no 'nickel and dime' operation?
    Dave, shayla and cjmst3k like this.
  26. framah

    framah PFG, Picture Framing God

    shayla, cjmst3k and David Waldmann like this.
  27. bruce papier

    bruce papier MGF, Master Grumble Framer

    A couple years ago, my Dad and I were downtown and decided to eat in a little local cafe where he used to eat a lot. We eat. We get the bill. He hands the waitress his credit card. She says they don't take credit cards. We both just looked at her and said "say what, now?" We were gobsmacked. She told us if we didn't have cash, just mail it to them because this happens all the time. I had the money because I'm antiquated.
    shayla likes this.
  28. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    A local diner doesn't take CCs. BUT they have an ATM in the back... :rolleyes:
  29. cjmst3k

    cjmst3k SGF, Supreme Grumble Framer

    ...like a strip club.
  30. framah

    framah PFG, Picture Framing God

    ....that only gives out dollar bills!!!:confused:
  31. cjmst3k

    cjmst3k SGF, Supreme Grumble Framer

    You can't get quality strippers with single bills. You need a minimum of $20 bills.
  32. framah

    framah PFG, Picture Framing God

    Interesting!! ...and you know this ... how??:confused:

    Well.. it's been a lonnnng time since I've been in a strip club and even then it was a biker bar so the women were more in the dollar range.:eek:
  33. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    is it true the bills come out f ATM precreased down the middle?
  34. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    If you don't take credit cards because you are worried about monthly fees, equipment, etc. Consider square.

    Most of my business is check [from corporate] or cash, but some customers wanted credit cards because they could use the miles, so I converted.

    I think I paid $35.00 for a credit card reader from Square, [but I don't really use it much]. I do use their option where I send an invoice to the customer, and the customer pays the invoice. That way I never even see the customer's credit card.

    And there are no monthly fees; only the 3% [plus or minus] when I actually use the credit card via the reader or via the invoice.

    Credit card processing is not that expensive.
    shayla and Bob Carter like this.
  35. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    the great thing about owning a biz is you get to run it as you see fit

    lots of biz make decisions based on their whims. Not offering any feature that makes it easier for the consumer is goofy. Kind of like not having a website because you don't like the internet. I'll guarantee someone without a site will swear they have 'never lost a sale', too
    wouldn't you love to have any other expense that actually only cost you when a customer bought something?
  36. Kirstie

    Kirstie PFG, Picture Framing God

    A local very busy soup and salad restaurant a block from our shop in a heavily trafficked student area takes only credit cards. No cash. And they have lines down the sidewalk at lunch. Reasoning? Safety and speed and perhaps keeping vagrants out, but that's just a guess. They process my card for take out lunch in a blink. No signature needed. I only touch the terminal to say what percent tip I want to leave. Debit or credit seem to be treated the same everywhere in CA.
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