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Credit card "checkout" fee allowed as of today, Sunday, Jan. 27 2013
"MasterCard said it doesn't expect most merchants to put the surcharge into effect, since stores won't want to drive away business.
"We anticipate that they will not impose checkout fees, particularly because the value merchants derive from card acceptance far exceeds their costs," the credit card company said in a statement."
Well, then..... Why does the fee EXIST? The individual customer is the one who gets screwed, if he/she is unlucky in the choice of which store to shop at. If this was supposed to be a regulatory restriction, it is, plainly, just the opposite. The fox is in charge of the henhouse, despite the verbiage to the contrary.
Reply to @MaxBialystock: When you use credit card, the card company charges the merchant. Previously the card company prohibited the merchant offering discount for cash. So this is about that option. So, you can either interpret it as merchant giving you discount on cash or you are paying extra for using card. It is up to you.
I do have cash back card. The cash back is coming from the fees the merchant pays to the card company. In other words, now you will get instant cash back by using cash payments.
Reply to @Investor: Logical. I suppose I can admit that I tend to operate with tighter personally-imposed restrictions than most folks. I just don't want to do business with any of those Big Monster banks, most of whom were bailed out with taxpayer money, and they operate now, after having been bailed-out, like Financial Predators. The cash-back gimmick reminds me of the silver and gold coin gimmick at my local supermarket chain. Of course it accomplishes nothing, other than to point out the illogic of it all, but I like to create the opportunity to say to the cashier: "Hmm. I have a question... Yes? If "Big Y" can give me that discounted price on those particular items labeled with the coin-connected-discount, then why bother with the ridiculous coins? Why not just sell it for the lower price???" There's never a response. It's just policy. Or, that's not up to me...
Reply to @Investor: I find a similarity between the way credit card charges work and the way NTF funds work. In both situations, you think you're getting an extra service (paying with plastic, buying through a broker) without explicitly paying for the service. In both situations, the price of the service is embedded in the cost of the transaction.
Some funds are NTF and some are not. The NTF funds incorporate the broker charges into the ER (either explicitly via 12b-1, or implicitly by charging higher management fees and the management co. pays the broker). Either way, you're paying for a convenience. An alternative is to buy a TF share class directly from the distributor and avoid both a commission and the higher ER for an NTF share class.
With a retail purchase, you likewise have a choice of using a service (credit card) that has a built in fee to the retailer, or you can eschew the service and hopefully pay less (with a cash discount, or not getting charged extra for using a credit card).
In both cases (fund supermarkets and credit cards), the entity charging for the service (the broker charging the fund, the credit card bank charging the retailer) claims that it is saving the fund/retailer money by offloading bookkeeping/reducing costs of handling cash. And in both cases, there's some truth to that. But usually not enough to justify the fees.
Some investors/customers don't use the services (i.e. they buy a fund direct from the distributor/pay cash instead of charge), and so wind up subsidizing those who do use the services. As a credit card user who gets back 2-5% and always pays off his bills, I reap the benefit of this subsidy. Even when there's a cash discount for gasoline (to eliminate this subsidy), I usually come out better with a credit card (especially when they're offering 5% back, as, e.g. Chase does now).
Reply to @msf: I absolutely agree. I am one of those that cash payers was subsidizing via cash back awards until now. Let's see how many retailers will offer discount/surcharge. I might have to carry more cash going forward.
Comments
Fixed. Thank you for the note.
I do; but had not yet checked this immediate after posting.
Catch
"We anticipate that they will not impose checkout fees, particularly because the value merchants derive from card acceptance far exceeds their costs," the credit card company said in a statement."
Well, then..... Why does the fee EXIST? The individual customer is the one who gets screwed, if he/she is unlucky in the choice of which store to shop at. If this was supposed to be a regulatory restriction, it is, plainly, just the opposite. The fox is in charge of the henhouse, despite the verbiage to the contrary.
I do have cash back card. The cash back is coming from the fees the merchant pays to the card company. In other words, now you will get instant cash back by using cash payments.
I find a similarity between the way credit card charges work and the way NTF funds work. In both situations, you think you're getting an extra service (paying with plastic, buying through a broker) without explicitly paying for the service. In both situations, the price of the service is embedded in the cost of the transaction.
Some funds are NTF and some are not. The NTF funds incorporate the broker charges into the ER (either explicitly via 12b-1, or implicitly by charging higher management fees and the management co. pays the broker). Either way, you're paying for a convenience. An alternative is to buy a TF share class directly from the distributor and avoid both a commission and the higher ER for an NTF share class.
With a retail purchase, you likewise have a choice of using a service (credit card) that has a built in fee to the retailer, or you can eschew the service and hopefully pay less (with a cash discount, or not getting charged extra for using a credit card).
In both cases (fund supermarkets and credit cards), the entity charging for the service (the broker charging the fund, the credit card bank charging the retailer) claims that it is saving the fund/retailer money by offloading bookkeeping/reducing costs of handling cash. And in both cases, there's some truth to that. But usually not enough to justify the fees.
Some investors/customers don't use the services (i.e. they buy a fund direct from the distributor/pay cash instead of charge), and so wind up subsidizing those who do use the services. As a credit card user who gets back 2-5% and always pays off his bills, I reap the benefit of this subsidy. Even when there's a cash discount for gasoline (to eliminate this subsidy), I usually come out better with a credit card (especially when they're offering 5% back, as, e.g. Chase does now).