Growing number of businesses tacking on fees for using cards, economic analyst says
PITTSBURGH (KDKA) -- Many say America is becoming a cashless society with so many people using their debit or credit cards to pay for the littlest things. But using a card could become a little bit more expensive in the future.
We use credit and debit cards for just about everything -- buying a cold drink on a hot summer day to food at a restaurant or a hotel room on vacation. It's rarer than ever when someone pays cash, says Mark Hamrick, a senior economic analyst with bankrate.com.
"There are increasing uses of electronic payments that have sort of sidelined the use of cash," Hamrick said.
But there's always been a cost to the vendor for accepting cards instead of cash -- usually two to four percent of the purchase price, and most businesses just ate that cost. But recently, Hamrick says a growing number of vendors are now tacking the transaction fee onto their bill.
"Where we have businesses that are tacking on additional fees, let's be honest here. This is just a not-so-glorified way of raising prices on the consumer," he said.
"We've been paying that percentage since we opened 31 years ago, and now we are passing it along to the consumer who's choosing to use a credit card," said David Regan, owner of Mullaney's Harp & Fiddle in the Strip District.
Regan says his bar and restaurant recently joined others in charging customers the processing fee if they don't pay in cash.
"People don't seem to mind. It's on your receipt when you get it. It says you're paying either cash or credit card and there's a different price, and people don't really seem to mind. It's not that much, but for someone like us it adds up over the course of a year, and it's tens of thousands of dollars," he said.
Depending on the card you use, it's two to four bucks on every hundred dollars you spend. Hamrick says customers must be alerted to this charge in advance, and he thinks state and/or federal regulators may step in.
"I do think this is a looming area for policy at the federal level, possibly at the state level as well," Hamrick said.
"As consumers, we have to choose where we want to do business, and we don't have to choose to do business with a place that is essentially going to put a price hike in place to cover their transaction costs."
Regan says he's posted a sign to alert customers to the charge, and so far, very few have objected.
