New rules re credit card charges

AllieKat · 1 February 2018 at 6:52PM

This is nothing new, Aldi, like all reputable mainstream retailers, never charged a credit card surcharge. They're just bad for business!

chattychappy · 2 February 2018 at 3:40AM

AllieKat wrote: »

This is nothing new, Aldi, like all reputable mainstream retailers, never charged a credit card surcharge. They're just bad for business!

As a technicality many did for a while. You might change your mind about "reputable" when you know why. It was a VAT dodge.

There is no VAT on pure finance. Little notices started appearing at checkouts. The gist was that if you paid by CC, the price would be discounted by perhaps 5%. The sale would then be processed by a related finance company who would then add a finance "fee" and accept payment by CC. Having deducted their fee, they'd pass the balance to the retailer. The result was that you paid the same amount overall. BUT, the retailer would only have to account for VAT on a reduced sum. The saving could be as much as 20% of 5%, ie 1%. An extra 1% on the margin was well worth having (though there would be no advantage for zero rated items).

The scam was stopped. I forget now whether it was as the result of an HMRC court challenge or whether the regs changed.

AllieKat · 4 February 2018 at 12:52PM

Yeah, I wouldn't count that behaviour under 'reputable' - that seems like a great example of exactly my point in using the word reputable, in fact

Thanks!

enthusiasticsaver · 4 February 2018 at 1:01PM

Lidl have never charged for credit card transactions although for a while they would only accept debit cards. That changed a few years ago now though. As I understand the new charges nobody can now charge for credit card transactions.