Want to Help Local Restaurants? Pay Cash

20 08 2009

I found this Free Press article from @joefoodie on Twitter.  This jist of the article is that some Detroit area restaurants are starting to offer “discounts” to patrons who pay cash instead of using a credit card.  Why would they do that you ask?  They make more money. 

Each swipe of a card costs him a flat 15 to 20 cents, he says, plus add-ons of 2% to 3% of the transaction amount.

“If you do a high volume of credit cards, at the end of the month it adds up. It’s the volume you do, so by turning around and giving back to the customers, it’s a win-win: You’re giving back to the customer, and in return you get people coming into your restaurant and keeping you afloat.

OK.  That makes sense from a business standpoint.  From a consumer stand point, he’s walking a fine line.  According to your terms of service with your credit cards, retailers can not charge you more to use your card than they can if you pay cash.  In Michigan, doing this is not illegal.  In 10 other states, there are laws against credit card surcharges.

I said earlier the article featured in the story was “walking a fine line.”  Technically, he’s not charging more to use a credit card.   He’s giving a “discount” to use cash.  It’s sort of a grey area that gas stations have been using for sereral years to give consumers an incentive to pay with cash so they can increase their profits.  As long as they don’t call it a payment card checkout fee, they’re probably going to get away with charge YOU more to use a credit card. 

Surchage.  Cash discount.  No matter what they call it, it’s accomplishing the same thing.  My family is very big on paying in cash.  I, on the other hand, almost always pay with credit.  I just don’t like carrying more than twenty buck or so.  If I have the cash, I will pay with it, but most times I don’t.

What’s the moral of the story?  Ultimately, how you pay is up to you.  If you frequent a local joint often, think about paying cash.  You’ll be helping the owners of the place by letting them pocket that extra 2-3%.  It’s a good thing to do, but if businesses are going to accept credit cards, they shouldn’t penalize you for using one.

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One response

21 08 2009
John Hritz

The other thing about the whole cash vs credit thing is that banks charge for cash deposits and for counting coins. Its also is a hassle to predict how much change you’ll need for the day. The more cash you keep on-hand the more of a target for robbery you become (even with a timed safe and drawer maximums).

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