CC Merchant Charges

AlanSOAS

You may be aware that credit card companies charges the retailers( merchants )a % fee for processing the transactions. Thats the way CC companies make money. It is also convenient for the retailers, no cash handling etc.

I have notices a tendancy in some petrol stations and supermarketsd saying Some nonsence like " by using my credit card YOU incurr a charge of 2.5%, which WE will pay for YOU...

Is this the opening gambit of retailers to start passing on this charge ( their overhead to us).

what next the cost of heating and lighting.

I smell a rat?

Alan

Clariman

AlanSOAS wrote:

You may be aware that credit card companies charges the retailers( merchants )a % fee for processing the transactions. Thats the way CC companies make money. It is also convenient for the retailers, no cash handling etc.

I have notices a tendancy in some petrol stations and supermarketsd saying Some nonsence like " by using my credit card YOU incurr a charge of 2.5%, which WE will pay for YOU...

Is this the opening gambit of retailers to start passing on this charge ( their overhead to us).

what next the cost of heating and lighting.

I smell a rat?

Alan

Hi Alan. I don't think that this is an omen that they are about to pass on the charges directly to customers. I don't know the details, but I believe that they do it for tax reasons. I think that they can claim that 2.5% of what they receive from you at the till is not for the sale of their goods, but is a cost of doing business. Someone may know more detail.

Clariman

jonesMUFCforever

This is true. They can claim back the VAT on this portion of the transaction as it is an expense to them.
Eric

jeeves_2

ejones999 wrote:

This is true. They can claim back the VAT on this portion of the transaction as it is an expense to them.
Eric

Hello...VAT is not chgarged on credit card charges, it is VAT exempt.
There was a time when mail order companies especially computer traders use to pass this charge on the customers, anything from 1.5-2.5%.
However this is not happening as often these days.
Some petrol stations do have a minumum spend before they take plastic, this is mainly due to debit cards. Debit cards have a fixed charge, usually approx.50pence per transaction, whereas Credit CArds are a percentage.


Jeeves

Reaper

VAT is charged on the goods you are buying.

Here is a post from an old thread which explains how this tax dodge works.