Retailer Fees

doubledad

Hi, a quick question regarding fees.

I want to make a purchase on my Credit Card which will be around £4000, I spoke to the retailer yesterday and he advised me that he'd charge me 3% to use my card for the purchase, that seems awfully steep and I wondered if it was right?

I used to work in a showroom a few years ago and our most expensive item was £3000, whenever we sold anything we were asked by the office to add a £7 surcharge to the invoice to cover the CC fees, it's a heck of a difference!

I've had a rummage on Google but can't find any clarification so thought I'd ask here to see if anyone knew the answer.

Thank you for any information you can offer.

chattychappy

Retailers can be charged anything from around around 1% to 4%. It is charged on the amount collected. So if the items have VAT on top, then the fee is applied to this too (so it costs them 20% on top - this is not reclaimable by them from HMRC because it's a fee, not VAT itself).

Whilst the risk to them is relatively low for cardholder present transactions, they still suffer increased risks/costs from chargebacks and dispute handling. Of course there are costs to handling cheques/cash too.

It is entirely up to them what they charge - but 3% is not outrageous. There are moves afoot to outlaw surcharges above the cost to the merchant - but that's for the future.

doubledad

Dagnabit! I was hoping you'd say "Yes, he's a robbing dog, punch him in the throat and refuse to pay" - ho hum, thank you for taking the time to answer, much appreciated.

dalesrider

Just remind them of the new OFT directive on retailers charging a surcharge.....
Then walk out the door and go elsewhere.

CLAPTON

dalesrider wrote: »

Just remind them of the new OFT directive on retailers charging a surcharge.....
Then walk out the door and go elsewhere.

do remind us what the new guideline actually says

Sparx

His merchant services provider depending on his turnover will be charging him anywhere from 1% to 3% realistically on credit cards.

However when it comes to debit cards, merchants are only charged a fixed 10-30p no matter what the tranx value is, hence this charge is imposed by a lot of companies for high value transactions when using credit cards.

So you paying him £4000 on a CC is going to cost him £40 at minimum if his CC rate is 1% and he could only get that rate if his t/o was hitting £1m+ p/yr..

lisyloo

2.5% is more common in my experience, so 3% is not unreasonable.

exel1966

dalesrider wrote: »

Just remind them of the new OFT directive on retailers charging a surcharge.....
Then walk out the door and go elsewhere.

The OFT directive was specifically aimed at passenger travel though their views apply across the commercial board. It didn't decree surcharges unacceptable, just that they should be made more transparent ie. included in the headline price.
It would be quite reasonable for a high street retailer to assume a payment by means of cash/debit card, therefore charging the headline/advertised price. If the consumer chooses to pay by credit card the retailer retains the option to charge for that privilage or refuse to sell, just as the purchaser has to go elsewhere or negotiate the charge.

God help us if we ever get to the stage of (regulatory) two/three tier pricing, one for cash, one for debit cards and one for credit cards like still happens on fuel purchases at some gas stations in the US

dalesrider

CLAPTON wrote: »

do remind us what the new guideline actually says

Google is your friend.

Interesting to note that some companies now add a fixed fee, which in many cases is ending up more than the % fee from before....
Still ripping little man off...

Given that a retailer knows just how much % they get charged. there is no need at all for ANY extra charge for using any type of card.
They should be building this into their proce model.

lisyloo

They should be building this into their proce model.

Are you suggesting a flat price for everyone?
Why should some customers subsidise others?

Not sure I agree they should build it in when some of us are prepared to pay with cheaper methods.

They should make it CLEAR, I think we could all agree on that.

pvt

dalesrider wrote: »

Then walk out the door and go elsewhere.

Like somewhere that doesn't make a CC surcharge, but charges 10% more for the item than the first retailer?