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