Why are gun stores/dealers the only business to charge credit card fees

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There's 2 charges associated with using credit cards: the credit card provider (Visa, etc.), and the credit card processor. Many credit card processors refuse to serve firearms-related businesses, so finding a processor that will serve them often means going with a slightly more expensive one.
 
You ever notice that online gun ads such as gunbroker and gunsamerica always say the price displayed is a cash discount and you should add 3-6 percent for credit cards. Not to mention some of my local gun stores also charge a credit card fee. Why is this? I do notice that during this shortage several gun stores/dealers are being incredibly greedy but what is with the credit card fee no other buisness charges credit card fees.
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It is not greed. Try running a business with a significant liability, overhead, cost of good sold, and competition. Then come back and call them greedy.

Yes, I have noticed this, and I find it a bit agitating.

Many of the gun stores around here will upcharge you a few percentage points if you use a credit card. No other business that I'm aware of has such a practice. Someone once told me that this is blatantly against the terms of the agreement that a business signs with the credit card providers, but I have no way of knowing whether or not that rumor is true.
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Government agencies around here charge a 3-5% convenience fee for use of a debit card/credit card. Several different retailers (liquor stores, service industries) give a discount for cash.

Still, I hate getting the sour looks when I pull out a debit card a gun store. Give me a break, it is the way society is these days... If I can use a debit card at Mcdonalds I ought to be able to use it at the local gun store (when they are setup to take cards)!
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McDonald's margin is a hell of a lot higher than a typical gun store. The average markup of fast food is about 300%, which of course, I think McDonald's is not complaining about someone using their debit card when the cost of a dollar burger is $0.30 including labor. The gunshop is selling an item for $100.00 that costs $90, the credit card fees will take $3-$5 from their pockets.

I have not problems with cash discounts.
 
FACT: Charging a credit card fee is absolutely, positively prohibited by the agreement the merchant signs with the card processor. It's in every single merchant agreement I've ever seen in over 25 years. MC/VISA simply does not want the consumer to realize there is a cost to the merchant of accepting the card. And they sure as hell don't want the charge being passed on to the customer, as this might result in the customer paying cash, and them missing out on their card fee as well as possibly large amounts of interest they hope to eventually collect on the purchase if the customer uses the card to finance their purchase.

FACT: The merchant agreement does not prevent the merchant from offering a "cash discount". Again, at least not in any merchant agreement I've seen.

The simple fact of the matter is that it's the same thing. In other words, if a merchant charges more for taking a card, they are by definition charging less for cash. However, in order to comply with the merchant agreement, the merchant *must* be quoting the higher price and then offering a cash discount with those exact words.

Speaking as a merchant (in a completely different industry), I don't like the fact that MC/VISA prohibits me from using the wording I prefer. (And I don't have a choice, since I have to agree with the contract if I want to accept credit cards.) Quoting a cash price and charging more for a credit card is the more transparent (and I believe honest) policy. In other words, it lets the customer know that accepting the card raises the merchant's overhead on that sale by approximately 3%.

So, one or more of the following is probably true of the store owner who still charges a card fee:

1> It simply makes more sense to him, as from his point of view, charging a credit card fee more accurately describes what's actually happening.

2> He doesn't like MC/VISA telling him how to run his business, or at least telling him which words he can or cannot use in the day to day running of his business.

3> He hasn't had a customer complain about the credit card fee. If a customer complains to MC/VISA, it *WILL* be crammed back down the merchant's throat. Even if it was properly worded at the time of quoting/sale, if the card charge is shown in any way on the paperwork, and the customer complains, MC/VISA will cram it back down the merchant's throat. Just ask me how I know. :(


-Matt
 
By the way, this is very similar to the practice of adding PayPal fees. The PayPal user agreement also specifically prohibits this practice, yet it's still not uncommon to see it done. And, if I remember correctly, the PayPal fee comes out closer to 5% in most cases.

For what it's worth, the merchant fee for the Discover card is approximately 1% higher than that of MC/VISA. Whenever I've checked, American Express has always been approximately 2% higher than the MC/VISA rate I was paying.

-Matt
 
Not only the higher fees, but the merchant takes on some risk with credit cards as opposed to cash. PayPal charges higher fees to the merchant for credit card sales as well.
 
If you can't pay for purchases in cash why put them on plastic and pay the interest to the CC Co.?
If you can only pay by plastic go to a larger Box Store where you will got zero service and higher prices (like gander Mt.)
 
I always check that part of it out and if they charge you their fee I just usually skip right on by them and take my business elsewhere. I feel that after you pay the high interest rates the cc companys charge then that is enough, you don't need to pay the merchants fee too.
 
Sig, you might try using cash so you aren't paying the high interest rates charged on credit card purchases (if you don't pay off your bill monthly).

Adjusting to cash is not that difficult for normal day to day stuff. Save the credit cards for paying for car repairs and larger purchases. Oh yes, do pay with a debit card when buying gasoline... too much trouble to pay with cash.
 
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When I paid the utility bill a few months ago with a credit card they charged me a fee for using it.

SpecialKalltheway said:
yeah the title of this thread should be "Why are gun stores/dealers the only buisness up front about charge credit card fees"
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Good point!
 
Don't want to pay the card fees?
Cannot afford to pay cash?

Simple.
Negotiate your price.
Pay with a check.
Go to your bank.
Get cash advance on your CC. (Bank does not charge you the fees)
Deposit cash advance into checking account to cover the check you just wrote.
You have just put you new gun on your CC and didn't pay the fee. (however your CC company may charge you higher interest on the cash advance than they would on a purchase so it may be a wash in the long run)
 
Get cash advance on your CC. (Bank does not charge you the fees)
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They may not charge fees, but banks usually charge interest from the day of the cash advance until you pay the bill, which means no "interest free" period as with a simple purchase. If the accumulated interest amounts to less than the credit card fee, you will pay less than by credit but still more than if you pay cash. If interest comes to more than the card fee, you might as well pay with the credit card. Also, banks don't usually give credit card "points" for cash advances, so that has to be figured into it.
 
The real question is why are OTHER merchants allowing/forcing their cash-paying customers to subsidize their credit card customers? Why are credit card customers getting an invisible 3% discount that is , in many cases, partially refunded to them? If I go into a store with $100 cash and buy a $100 item, I pay $100 for the item. If I go into the store with a credit card and charge it for $100 , I only pay about $97 for the item and the CC company gets $3, and often they refund part of that to me depending on my CC contract. The Merchant has made 3% more off of the cash paying customer. If everyone paid cash, the merchant should (in theory) be able to lower the price of the item because they do not have to pay 3% to the CC company. Thus, cash paying customers subsidize credit paying customers.
 
Items I sell I build the 3% into the price. As of the incident I'm going through with a customer that bought a gun from me, was transferred to him in TX, and then is using the chargeback system to steal the gun from me I no longer accept credit or debit cards for firearms. I lost several hundred dollars on that transaction plus $35 in charge back fees for the first time and another $35 the second time including perhaps 10-12 hours getting the information required to fight it again with the CC company and I might still lose. I have a lawsuit pending pending against him. He should have a nice drive up to the UP of MI from TX.

This is the first time ever I've been f'd over by a gun owner. Now he ruined it for everyone else. No more CC's for guns.

I'm lucky to make 10% on a gun sale. Eating 3% and only making 7% is very difficult to make a living. Selling a Glock for $550 and making $38.50 on that sale is no way to pay bills.
 
Alot depends on who is doing your credit card processing. For my business I go through Sams who has some sort of contract with FirstData to do processing for small businesses.

Currently i pay 1.5% for Visa, MC and Discover and 2.9% for Amex. There is also a .19 trasaction fee. There is a minimum monthly fee of $20 but thats not hard to hit.

The fees suck but are not earth shattering, i simply work them into my prices. Being that i do full color banners, posters, stretched canvases and photo enlargements and the average ticket is $500. I figure that i pay about $7.70 per transaction. I work that into everyones bill whether it is a Hotel paying buy check or someone paying by Credit Card to have a picture of their african hunt put on canvas an blown up to 40"x60". In the end it is a small portion of operating costs.

By the way anyone need anything blown up :) ...pun intended...
 
If I am looking on gun broker I try to find the places that dont charge the extra fee or their price is that much lower then the places with out the fee.

The local courthouse charges extra fee if payment by plastic.

Gas stations charging extra doesnt make sense to me since everyone of them around here you have to prepay with plastic. Some will let you go inside, hand over cash then pump. But most are only prepay with plastic
 
rogertc1 said:
If you can't pay for purchases in cash why put them on plastic and pay the interest to the CC Co.?
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Credit cards are a scam, that is for sure. However, it's pretty much impossible to negotiate your way around the modern world without them.

Try and rent a car with cash.
Try and pay for an airline ticket with cash. (Well, hello Mr. TSA man ...)
Try and stay at a decent hotel and not have a CC on file.

Personally, I use a CC for just about everything, and pay it off every month. That gives me a couple of advantages:
1) I have a written record for all my expenditures ... great for me at tax time
2) If I'm having a problem with item I bought, I can dispute the charges with the CC company.
3) I get something back for the $ I spend. In this case, airline miles. I really enjoyed those three first class Baltimore - Hawaii tickets ... and I'll wager I'll enjoy the 3 first class tickets to Rome I -nearly- have enough miles for now.

Now, on the merchants side, the gun business is pretty much -very- low margin, as are most "hard" goods businesses. (ie, if when you hit yourself with it it hurts, it's a "hard good" and likely a very low margin sales product). He might be clearing 10 - 15% on the sale. Taxes will take 1/2 of that, so now you are down to 5 - 7%. The CC company wants to take 3 - 5%, so now you are down to 2% profit margin on your sales.

Guys and gals ... that ain't enough to live on. You'd be better off putting your money in a Christmas club.
 
Someone once told me that this is blatantly against the terms of the agreement that a business signs with the credit card providers, but I have no way of knowing whether or not that rumor is true.
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That is true by my agreement. The CC companies "suggest" that you price all goods and services with the +% for CC purchases and then offer a posted cash discount.

With the way consumer prices are being driven down (at least in my sector) by less work and more competition, many small business can't absorb the 3-7% cost of CC purchases.
 
Because no one calls them on it. I've heard that it goes against the agreements they sign with Visa, Mastercard, etc. If someone charges more to pay with a card, I shop somewhere else anyway.
 
If you see these places with different cash/credit prices, or if they charge you a fee to use a card, report it. This is PROHIBITED by all credit card companies.

Like the one gentleman above said, he builds in his 3%.. I'd never do business with him. Hard to make a living? It's hard for ALL of us these days...... I ran a bike shop for years, and I was 100% in line on all prices across the board. I struggled too. That's capitalism for you. Find a new business. That's what I had to do...

anyway.....

These are merchant violations, they are not permitted at all.

You can NOT have different cash/credit prices

You can NOT charge a fee for using a credit card

You can NOT set a minimum purchase price for use of a credit card....

You can NOT ask for ID on a signed credit card (I disagree with this one)

Mastercard reporting - http://www.mastercard.com/us/personal/en/contactus/merchantviolations.html

VISA - 1-800-VISA-911

LOTS more info here - http://creditboards.com/forums/index.php?showtopic=265954
 
For what it's worth, the merchant fee for the Discover card is approximately 1% higher than that of MC/VISA. Whenever I've checked, American Express has always been approximately 2% higher than the MC/VISA rate I was paying.
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Which is why a lot of places won't take AmEx cards. My company uses AmEx for their business travel expenses. The travel booking isn't a problem, but I usually have to put about half of everything else on my own card and wait 30 - 45 days to get reimbursed by the company bean counters. :rolleyes:
 
This is actually good -- to make the users of credit pay for the convenience instead of spreading the credit cars percentage charge to all customers.
 
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