#281121 - 05/05/2006 10:18
Credit Card Processing Fee
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enthusiast
Registered: 14/07/2002
Posts: 344
Loc: South Carolina
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My fiancee works as a cosmetologist at a local cosmetology shop, or Hair shop if you would prefer, as an "independant contractor", or booth renter as they say. So her booth rent is $xx.xx per week but in addition to that she is charged approximately a 10% fee anytime a customer uses a credit or debit card. It's not a straight 10% but a percentage rounded off to the closest dollar amount either weekly or monthly.
I'm very disturbed by this behavior from the shop owner. I feel that this is something that is borderline unethical and possiblly illegal.
Does anyone have any insight? Am I over reacting or do I have a right to be upset?
_________________________
Russ
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"The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will." Vince Lombardi
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#281122 - 05/05/2006 10:29
Re: Credit Card Processing Fee
[Re: russmeister]
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pooh-bah
Registered: 27/02/2004
Posts: 1919
Loc: London
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I think you need to research terms at other similar establishments and of course examine closely any contract that may have been signed/issued
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#281123 - 05/05/2006 10:35
Re: Credit Card Processing Fee
[Re: russmeister]
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veteran
Registered: 21/01/2002
Posts: 1380
Loc: Erie, CO
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I thought that the CC processing fee for merchants was more like 3% to 5%, not 10%. Only one store I've been to charges you more for using a CC, The Gendarme climbing shop at Seneca Rocks. The owner charges you an extra 3%. Oh, and gas stations used to charge the extra fee also.
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#281124 - 05/05/2006 11:20
Re: Credit Card Processing Fee
[Re: cushman]
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enthusiast
Registered: 14/07/2002
Posts: 344
Loc: South Carolina
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Quote:
I thought that the CC processing fee for merchants was more like 3% to 5%, not 10%.
Only one store I've been to charges you more for using a CC, The Gendarme climbing shop at Seneca Rocks. The owner charges you an extra 3%.
It is typically 3% to 5% but this is what the owner is charging the employees to use the machine. Maybe I didn't make that clear the first time. The consumer doesn't see a difference in the price unless the employees want to add that extra 10% on that they are being charged. That's totally up to the discretion of the employee.
But is it legal for the employer to charge the employee 10% per transaction to use the machine?
_________________________
Russ
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"The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will." Vince Lombardi
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#281125 - 05/05/2006 11:21
Re: Credit Card Processing Fee
[Re: tahir]
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enthusiast
Registered: 14/07/2002
Posts: 344
Loc: South Carolina
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Quote:
I think you need to research terms at other similar establishments and of course examine closely any contract that may have been signed/issued
There was no contract signed. They had a meeting to inform them of the changes.
_________________________
Russ
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"The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will." Vince Lombardi
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#281126 - 05/05/2006 12:05
Re: Credit Card Processing Fee
[Re: russmeister]
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old hand
Registered: 17/01/2003
Posts: 998
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It does not sound illegal to me (but I’m no lawyer). It appears the “hair shop” is passing on the cost of the transaction plus the cost of the machine plus a profit for themselves for providing the machine and service. If she truly only “rents” the space she should be able to obtain the funds from the customer however she likes. So perhaps she should look into getting her own credit card service or just refuse credit cards.
Usually things like this can be resolved by talking to the owner and laying it on the line.
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#281127 - 05/05/2006 12:45
Re: Credit Card Processing Fee
[Re: Redrum]
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pooh-bah
Registered: 27/02/2004
Posts: 1919
Loc: London
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Quote:
perhaps she should look into getting her own credit card service or just refuse credit cards.
Usually things like this can be resolved by talking to the owner and laying it on the line.
Agree. The rate charged by the credit card processor can be quite low, the company I work for pays less than 1.5% a high charge in the UK would be around 3% so whichever way the owner is taking a huge cut.
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#281128 - 05/05/2006 13:36
Re: Credit Card Processing Fee
[Re: russmeister]
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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Usually, the contract a business signs with the credit card processor says that they're not allowed to charge more for credit card purchases than cash purchases. Obviously, this is intended to prevent customers from being dissuaded to use credit cards.
Since his customers are really the cosmetologists and not the clients, I'd be inclined to say that this is in violation of his contract with the credit card processor, but adding that extra layer in there does add a new layer of complexity.
If I were your fiancee, I'd accept it and start looking for a new place to rent, especially if she has a clientele that will follow her.
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Bitt Faulk
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#281129 - 05/05/2006 16:40
Re: Credit Card Processing Fee
[Re: wfaulk]
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pooh-bah
Registered: 16/04/2002
Posts: 2011
Loc: Yorkshire UK
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Quote:
the contract a business signs with the credit card processor says that they're not allowed to charge more for credit card purchases than cash purchases
That's the general rule in the UK, with an exception for travel agents, I don't know the rights and wrongs of this, but apparently the margins are too slim*. over recent years, internet vendors have, on occasion, tried to charge a margin, but generally back down if challenged.
*the cost of my DIY booking for Majorca each September is around 40% cheaper than through an agent, so I guess they've got a point.
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Politics and Ideology: Not my bag
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#281130 - 09/05/2006 11:03
Re: Credit Card Processing Fee
[Re: russmeister]
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addict
Registered: 09/06/1999
Posts: 559
Loc: Newfoundland, Canada
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I know for a fact that here in Canada it is illegal for a merchant to charge a customer a fee to use a credit card, while they are free to charge for the use of a debit card.
Many corner stores charge a $0.25 - $0.50 charge for debit card usage, but they don't charge anything for a CC transaction.
Rene
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12 gig empeg Mark II, SN: 080000101 30 gig RioCar SN: 30103114 My blog
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#281131 - 09/05/2006 12:25
Re: Credit Card Processing Fee
[Re: ShadowMan]
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carpal tunnel
Registered: 12/11/2001
Posts: 7738
Loc: Toronto, CANADA
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I don't think the law comes into play in Canada for this issue. It's just a matter of merchant agreements. For example, it is against the VISA merchant agreement to charge a service fee for use of their product (the credit card). There is nothing to prevent a store from offering a cash discount however. And this is the loophole every small computer store has used for the past 20 years. You'll see the fine print on advertisements "prices are cash-discounted 3%"
I've never seen anyone with a policy of surcharging debit-card (ATM card) purchases. I've only used a debit card at a convenience store a couple of times though.
Bruno
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#281132 - 10/05/2006 00:41
Re: Credit Card Processing Fee
[Re: ShadowMan]
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carpal tunnel
Registered: 29/08/2000
Posts: 14496
Loc: Canada
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Quote:
I know for a fact that here in Canada it is illegal for a merchant to charge a customer a fee to use a credit card
Oh? And exactly which law would that be?????
WRONG. But the vendor card agreements usually heavily discourage such.
-ml
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#281133 - 10/05/2006 14:07
Re: Credit Card Processing Fee
[Re: mlord]
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addict
Registered: 09/06/1999
Posts: 559
Loc: Newfoundland, Canada
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I may have misworded that. It's against the contract that the stores have with the credit card companies.
I know this through past experiences with companies. One such company wanted to start charging a percentage fee for credit card transactions, they had to reword it after to state that any phone, fax or email order would be subject to the fee. This was a large company. Locally there is a small grocery store that charges the debit card fee, but there is no charge for using credit cards.
Rene
_________________________
12 gig empeg Mark II, SN: 080000101 30 gig RioCar SN: 30103114 My blog
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