comment: >
  
  Can you point out any businesses that do this to show it can viably generate a meaningful boost to sales to cover the loss?
context: /u/VeryCleverUsername4 (OP) has awarded 1 delta(s) in this post.
  All comments that earned deltas (from OP or other users) are listed here, in /r/DeltaLog.
  Please note that a change of view doesn't necessarily mean a reversal, or that the conversation has ended.
  ^Delta System Explained ^| ^Deltaboards >
  
  If credit card fees were handled by the business, wouldn't businesses just slightly raise the price of every item in order to compensate for the fees? Anything else would just be bad business sense. >
  
  That’s exactly what you see. 
  A business will charge $1.03 for credit cards and offer a “cash discount” moving it down to $1. 
  The customer always pays the fee. The question is just whether or not it is transparent. >
  
  So I have a question then what fees in the us are added onto the labelled price of an item. In Australia what price is on an item is the price customer's need to pay unless stated otherwise. Normally tax and other fees are put on before they tell us the price. >
  
  Opposite here. Price listed is the base price - taxes and fees are added on at the register. 
  This is because each stare/town could have a different tax rate so business advertise the price before that. >
  
  I guess that is pretty helpfull especially for online shopping, so a different site isnt needed for different states. I'm pretty sure we have a standard tax in each state that as around 12% I think and some items like alcohol and cigarettes have additional taxes on them. >
  
  It's not even just each state; each state, county, and town (even some 'sub towns' of towns like particular neighborhoods can have special taxes) can have layers of taxes so a line item might say 'Taxes: $1' and that's $0.43 federal tax, $0.21 state tax, $0.14 county tax, and $0.22 city tax. If any of those change for that kind of item, you'd have to update all the labels. 
  With 4 tiers of taxes, it just makes more sense to handle all of that at the point of sale. Digital pricing labels do exist, but they are not cheap to retrofit and have additional considerations like running power to every aisle and hardening shelves so when someone hits the electric rail with their cart, it doesn't cause problems. >
  
  Just to point out the obvious, the business does pay the fee. Do you ever make a second separate transaction to the payment processing company? No, obviously not.
  So then the question becomes, should the business allot the payments equally between all their customers, or just the ones generating the extra cost?
  There's arguments for both methods. Having everyone pay the fees is more efficient and saves everyone time.
  But the other argument is probably more compelling to most people. Should the customers who create the cost be responsible for it? Or should their purchase be subsidized by everyone else?
  It's generally a negligible cost, so usually people don't think about it. But in the interest of fairness, it probably should be born by the people incurring the cost. >
  
  That's basically how it works at our shop. We always inform new customers of the processing fee and most will write a check on the spot, especially when their bill is a couple thousand dollars. >
  
  For small purchases, maybe where the fees are up to $10, it probably makes sense to spare everyone the hassle of paying their own fees. But at a certain point, clients probably would like the option. If they could save $30 that might be important to a small business. It might not matter to Adidas. And I assume most people know their clientele and are adjusting their model to that. But someone mentioned that fees for their product can be in the hundreds, and at that point it's pretty important to everyone. Even if Adidas can pay that with no sweat, if you're the one paying and can tell your boss you saved Adidas X hundred dollars a year by mailing checks or doing wire transfers, that's money you could ask to take a cut of in the form of a raise. >
  
  On big purchases, I'll often email the business and offer to wire the money to them in exchange for a discount that effectively splits the credit card processing fee. If you're spending $10k, you can usually get them to knock $150-$200 off, and everybody wins. The credit card I would use would typically cost them 3.5-4% or more (depending on their arrangement with their processor), so knocking a couple hundred bucks off the price in exchange for me wiring the funds => I save money and they make more money. >
  
  The business needs to make money, and if they’re losing money paying the credit card company because they don’t pass the service fee on to the customers, they’re just going to raise the prices of their goods in store to stay afloat >
  
  It's actually worse if they don't charge the customer.
  There's two types of business: ones that do charge and ones that don't.
  Suppose a business bought their item for 50cents, and they sell it for $1.
  For the business that do charge you use using CC, it means they'll charge you $1 flat or $1.03 if you use a credit card.
  For the businesses that don't charge for convenience fees, it means the product is being sold for $1.03 to all customers. So whether you'll be using CC or cash, it'll cost $1.03.
  So you're proposing everyone to pay more for product even tho they've been saving money for paying cash.
  .
  Side note, for those who are financially responsible, paying with CC is almost always worth it because of the points/cash back you get for spending with CC. There's some card that gives you 5% Cashback where the convenience fee is 3%, so that's a 2% Cashback for spending with CC >
  
  Credit cards like visa also double warranty periods on some purchases and can include insurances on things like car rentals >
  
  Every cost a business is charged is ultimately paid for by the customers. If there's insufficient profit the business closes, and if there's a lot of profit then at least in theory competitor emerge to undercut the business, so the profit margin tends to be pretty fixed.
  All this would do is result in prices being raised which means everyone gets charged. >
  
  You say that even though they lose 3 cents, they’re making 97. But that’s not true.
  I run a small business making chainmaille jewellery. I pay a 1.9% fee. Let’s call it 2% for ease of maths. Now let’s look at a $100 necklace. 
  I’ve paid $20 for materials. It took me 2 hours to make. An apprentice jeweller makes roughly $30 an hour. So that’s $80 spent before you buy it. So that $2 fee is 10% of my profit. 
  Now we need to factor the weather on tools, the fees for a stall at the market, the labour cost of running the stall, insurance, transport. The time I spend on advertising and social media. Taxes. All these extra costs that aren’t per item, but still need to be covered by my sales.
  And that’s a one person operation that doesn’t use specialised tools and can be done from my back room. Now imagine a store with a physical premises and multiple staff. 
  Those fees can add up fast >
  
  There is absolutely no difference between charging the customer a 3% fee and charging the business a 3% fee. Either the business charges the customer about $103 for 100 units of stuff or the customer pays $100 for about 97 units of stuff. 1.5% is charged to the customer and 1.5% is charged to the business. You can charge either the buyer or the seller in the short run, but there is no possible way to charge more to the seller or the buyer in the long run because either the supply or demand for the good or service will adjust to the new equilibrium. It's like dissolving salt into water. It's impossible to say that the salt is getting wetter than the water is becoming salty.
  This is an idea that is taught in entry level economics courses. Unfortunately, most people in the US don't take economics in high school or even in college. Personally, I think this is the single biggest knowledge gap in the US. If you've never taken economics and are interested, I suggest the Khan Academy videos. I also suggest NPR's Planet Money Summer School podcast. >
  
  I worked for a company that was in business to business sales. Sales could be $400 all the way to hundreds of thousands of dollars. Industry standard was to pay with a check after invoiced. So prices were based on cash. 
  On occasion customers would want to pay with a card. On a $10,000 order, that is $300 in fees. Why would we eat $300 of profit? When they were often buying OEM parts where is was at best, extremely difficult to source elsewhere. >
  
  
  Why would we eat $300 of profit?
  
  You don't, you account for it in the price. >
  
  So we should raise the price for everyone because a small percentage wants to use a card? >
  
  Shops generally account for their costs in the price of things they sell.
  See when a shop offers free delivery on something, did you know that when you pay the same for it in the shop, you're subsidising the free delivery for the person who doesn't buy it in-person?
  Cash as a percentage of all payments in 2021 in the UK only accounted for 15%. What do you think "small percentage" means? Debit cards accounted for 48%.
  In the US, cash only accounted for 11% of purchases in 2021, with credit and debit amounting to 70%.
  Edit: Amended UK figures to the latest 2022 report covering 2021. >
  
  I’m not talking about society as a whole, but specifically the company I worked for. So those numbers don’t matter. 
  Maybe 1 in 20 of the parts business wanted to use a card. And basically none of the labor or capital purchases used a card because most people don’t want to use (or obviously don’t have the credit limit to purchase) $80,000-$1,000,000 on a card. >
  
  
  And basically none of the labor or capital purchases used a card because most people don’t want to use (or obviously don’t have the credit limit to purchase) $80,000-$1,000,000 on a card.
  
  What method of payment are they using for $80k+ that isn't incurring fees then? I doubt they're paying hundreds of thousands in cash. >
  
  A check. 
  You have to remember we are talking about major corporations. Manufacturing plants, hospitals, very large office buildings. >
  
  
  A check.
  
  So you have a significantly higher risk of failed payments, you have delays on processing times too.
  You might as well take payment in locked briefcases that unlock after an arbitrary timer expires. Maybe you'll have the money, maybe you won't.
  Your scenario isn't really representative of what OP is talking about though, so it's weird to focus primarily on large-scale transactions like that where OP is discussing standard consumer shopping. Nobody is expecting card or cash payments approaching millions, it'll be more likely to be direct bank transfers at that amount. >
  
  We do credit checks. These are often repeat customers. Rarely do we get burned. 
  If we ever had problems with payments, which has happened with like three customers, we make them pay in advance before we ever do work for them again. >
  
  
  Rarely do we get burned
  
  Rarely is more than never. If you don't want to risk a $300 card processing fee, why would you potentially risk a $100,000 transaction by cheque? >
  
  Small opposition is wondering how this will be enforced? All this will do is raise prices. 
  A great example is free shipping and free returns. The cost of the item is increased to cover these without the consumer knowledge. Convenience fees would likely be the same. 
  I understand where you’re coming from, but in practicality the consumer always pays >
  
  Yeah things like free shipping and returns aren't free. But people think they are. The buyer would rather pay $20 with free shipping than $10 plus $6 shipping. Ive found that I'm making a lot more money by raising prices more than the shipping cost, and then saying it's free shipping. Margins went up, and so did the number of sales. It's insane. >
  
  Believe it or not, there are a good many businesses that run on a very low margin.  For instance I sell televisions to hotels.  The orders are $50,000 or more.  TVs in this industry are a commodity.  If my cost is $100,000 and I make a 4% markup, I make $4000 on the sale.  If I accept a credit card on that order I pay close to $3000 in processing fees.  Multiply that by 10 sales of that size a year (typical), and assuming I took credit card on all, that is $30,000 in credit card fees and $10,000 in profit.  No credit card, my profit is $40,000.
  Not all sales are this big, but multiply 500 small transactions a day and it still adds up.  The options a retail business has is to charge enough to cover potential fees, or mitigate that fee by charging a convenience fee.  Raising prices makes you less competitive which results in loss of sales.  Anyways that is my take. >
  
  But that's why you include all your costs in the final price of your product. 
  When you sell these TVs, you buy the TV for what, let's say $1,000, then you turn around and sell it to a hotel for what $1,040. What does that $40 cover? Your salary, your employees salaries, insurance, lease on your buildings, etc. Well, why not, and let me come up with a novel idea, why not just then sell your product for $1,060 and now you can cover an additional cost which is a credit card fee?
  I like how people are coming up with excuses. If you can't figure out to run your business, then you shouldn't be running a business. ANd if you're calling card processors middlemen who just charge fees, then what the fuck are you but a middleman when the hotel could just go straight to Samsung and buy the TV. But no, you've decided to put yourself right in the middle to help out. What makes you think you deserve to make a little money being a middleman but some other card processor shouldn't? >
  
  So if I advertise a TV for $500 including my 3% and the next guy advertises theirs at $485 not including the credit card fee, the guy at the $485 price point wins the deal.  You are making the assumption that every person selling something works under the same set of rules.  That is wishful thinking, not reality.  No the customer can’t go to Samsung directly.  They have to go through a distributor unless they are very large (40 hotels or more).  You don’t have even a small clue how business works. >
  
  Those are just excuses for why you should be in business.
  Can they really not go straight to Samsung? If push came to shove, that hotel could go straight to Samsung and pretty quickly both Samsung and the hotel would figure out that you're eating a little bit of their lunch.
  Look, we're all middlemen in a way. >
  
  The answer is an absolute no, they cannot buy directly for Samsung.  Let me put it in more simple  terms. Can you call Coca Cola and say you are coming to the factory to pick up a 12 pack? >
  
  If the merchant pays the credit card fee, then they have to increase their prices by 2-3%. This punishes the people who pay with cash who aren't costing the merchant any more money. >
  
  Cash handling costs money as well. >
  
  Exactly! Unfortunately people don't look at it that way. People coming up with these excuses don't think "well, shoot, now I have to make sure my cashiers are doing it correctly and not shorting me or shorting my customers, and then I have to count and reconcile all the cash, and then I also have to pay someone to go to the bank and deposit it all while trusting all these people not to steal from me."
  People on this thread seem to think "credit cards have fees, cash doesn't. cash wins."