Often times you will find cash only businesses, especially in Chinatown and restaurants that will give you a discount on the final bill if you pay in cash. I have been to some mid-range restaurants that will knock 10% off my bill if I pay in cash instead of credit. This is the merchant fighting back using their own stratagems.
In many cases in my experience the vendors who can successfully pull off this strategy have a high quality, high value product and operate in a no-frills store front and are often family owned, maybe a generation or two already. There is a Vietnamese banh mi sandwich vendor where I live who has been around for 30 years only accepts cash - they have the history and patronage to pull this off.
And then there are plenty of other merchants that are 100% cashless, presumably because they don’t want the hassle (and perhaps cost) of handing, exchanging, storing, and transporting paper cash and coins to and from a bank.
> I have been to some mid-range restaurants that will knock 10% off my bill if I pay in cash instead of credit. This is the merchant fighting back using their own stratagems.
Not sure how things are in the USA, but in Germany, that has nothing to do with "fighting back" and everything with dodging VAT.
Cynically that's probably often the case but if you're offering <$10 food items at a mom & pop shop the credit card fees are non-trivial so there probably is a very legitimate incentive to take cash. There's also benefits to getting immediate cash that you can put in the bank for expenses at the end of the day vs waiting a day or two for credit card money.
> if you're offering <$10 food items at a mom & pop shop the credit card fees are non-trivial so there probably is a very legitimate incentive to take cash.
Yeah, but not a 10% incentive, especially given that depositing cash isn't free either, for commercial accounts.
> There's also benefits to getting immediate cash that you can put in the bank for expenses at the end of the day vs waiting a day or two for credit card money.
> There's also benefits to getting immediate cash that you can put in the bank for expenses at the end of the day vs waiting a day or two for credit card money.
patio11 actually argues that it's the opposite which explains why stores offer you to take out cash along with your purchase when you pay by debit card) in another article at https://www.bitsaboutmoney.com/archive/the-infrastructure-be... - "And so, getting magical paper out of the till and into your wallet without it first visiting the bank saves the retailer money. It can also, potentially, earn the retailer a small amount of float. Cash in its tills is dead money and may not be deposited until e.g. the end of the week or later, but selling that paper to a customer for real money results in it arriving in their bank account faster than physically walking it to the bank."
It might be different for a small mom&pop store that actually deposits their cash every day, of course.
The sort of obvious thing is that taking cash doesn't just save the merchant credit card fees but enables them to play games with the income they report for tax. Same with like repairmen that will give you a much better deal if you pay cash - it's not just CC fees they are avoiding.
Fun fact, this is actually illegal here in Sweden! That is, merchants aren't allowed to adjust prices based on payment method. Not sure what the reasoning is.
Because the main purpose of cash payments in small businesses is tax evasion - not just VAT but also paying family members in cash and thus dodging even more.
Fun fact, credit card merchants successfully made it illegal in the USA too, but that legislation expired and now it is legal to charge more for credit card usage (though credit card companies prefer that you offer a "cash discount" than an equivalent "credit card fee").
In Costa Rica this is illegal too but going through the hassle of reporting it to the local authorities is a pain and you won't gain much, just annoy the dealership.
Usually the POS rate is around 2% so at the end of the day you'll split it evenly and get a 3% discount. A few years back it was even highter and I bought several home appliances and saved around $100 so it's worth for both parties.
Now imagine people that deal with ranges from 10K to 100K - It's definitely worth it shaving a few bucks here and there
My local restaurant instituted a surcharge for card users. Kind of irritating but I understand why, considering the margins in the restaurant industry.
It used to be a violation of their merchant agreement but it seems a 2013 court case made it that as long as it's disclosed in a certain way, it seems to be ok. About 4 states still outlaw it, based on some digging, but none of the card rules that I could dig up allowed applying that fee to debit cards containing the logo (e.g. https://www.mastercard.us/en-us/business/overview/support/me... )
In many cases in my experience the vendors who can successfully pull off this strategy have a high quality, high value product and operate in a no-frills store front and are often family owned, maybe a generation or two already. There is a Vietnamese banh mi sandwich vendor where I live who has been around for 30 years only accepts cash - they have the history and patronage to pull this off.