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Thread: Even travel companies charging Credit Card surcharge

  1. #1
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    Default Even travel companies charging Credit Card surcharge

    This is not new issue, but I'm surprised when a airlines charge me for credit card surcharge ( this is a travel company represents an airline office in Malaysia) . If travel and airlines asking end-customer to bear the merchant fee, then who will not. We may soon see the rest of retailers follow this practice.

    While it;s understood that computer / electronics retailers practice this due to low profitability. But a travel company asking to pay this is new to me ?

    As a consumer I've choice not to go to merchants asking me to pay CC charge. But what is the policy of VISA, AMEX and MasterCard ? Do they allow merchants to do this ?

    Has anyone here made complains against such mercahants ?

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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Caussway View Post
    This is not new issue, but I'm surprised when a airlines charge me for credit card surcharge ( this is a travel company represents an airline office in Malaysia) . If travel and airlines asking end-customer to bear the merchant fee, then who will not. We may soon see the rest of retailers follow this practice.

    While it;s understood that computer / electronics retailers practice this due to low profitability. But a travel company asking to pay this is new to me ?

    As a consumer I've choice not to go to merchants asking me to pay CC charge. But what is the policy of VISA, AMEX and MasterCard ? Do they allow merchants to do this ?

    Has anyone here made complains against such mercahants ?
    U can try complaining... let us know the results.
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  3. #3

    Default Re: Even travel companies charging Credit Card surcharge

    Hmm.. I think its a common practice for travel agents. Just go around during NATAS Fair and sometimes the fine print on the brochure says "For NETs/Cash/Cheque only". So perhaps your travel company could have told you before hand. I took up the surcharge as I wanted the installment plan
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  4. #4

    Default Re: Even travel companies charging Credit Card surcharge

    Cost of business is high ... Somebody has got to bear this cost

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    Senior Member azul123's Avatar
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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Long Thai Bean View Post
    Cost of business is high ... Somebody has got to bear this cost
    But the question still remains, should the merchant be charging this? or they are conveinently passing it on the the consumer. Find out and you will be surprised.

    ../azul123

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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by azul123 View Post
    But the question still remains, should the merchant be charging this? or they are conveinently passing it on the the consumer. Find out and you will be surprised.

    ../azul123
    anyway, merchants who subscribe to visa or amex, etc... most likely have high markups, like food and entertainment. Likewise for the travel industry. u slash price to entice others, u will still have reserves. if u wanna slash your own wrist to compete, then wanna put a stitch back by asking consumer to bear the 3% or other cost, then isn't it killing yourself indirectly?

    imho, if i do this kinda business, i'd rather offer cash discount rather than offer credit card charge.
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    Default Re: Even travel companies charging Credit Card surcharge

    There are may cheap customers who want to pay be CC and get longer repayment period or want to accumulate CC points ... yet want low prices without service fees ....

    So how to resolve??

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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Long Thai Bean View Post
    There are may cheap customers who want to pay be CC and get longer repayment period or want to accumulate CC points ... yet want low prices without service fees ....

    So how to resolve??
    use my method lor...

    offer cash discount... pay by cash 5% off... looks and feel better.

    marketing depts should look for me for more innovative ideas...
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    Senior Member azul123's Avatar
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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Long Thai Bean View Post
    There are may cheap customers who want to pay be CC and get longer repayment period or want to accumulate CC points ... yet want low prices without service fees ....

    So how to resolve??
    Some people maybe doing that, but there are those things that sometimes you buy at the spur of the moment which may require large sums of cash beyond what you normally carry in your wallet, so CC is the only way to go and that is why the merchants signed up with the CC Companies.

    So people don't have to carry large sums of cash and still be able to buy the things they like, thus the merchants see as an opportunity cost not to have CC machines.

    ../azul123

  10. #10

    Default Re: Even travel companies charging Credit Card surcharge

    Now ... if we come back to the original topic of "travel companies charging credit card surcharge" then there is always the option of paying be checque ... and a travel arrangement is NOT a spur of the moment purchase.

  11. #11

    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Del_CtrlnoAlt View Post
    use my method lor...
    offer cash discount... pay by cash 5% off... looks and feel better.
    marketing depts should look for me for more innovative ideas...
    All prices ar quoted in cash to start with ...

    Whats the point of inflating the cost and then giving away a 5% discount ... It may make people feel good ... but at the end of the day ... are the consumers actually benefitting from it?

    On the POV of the seller, your goods will look more expensive if you did that anyway.

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    Senior Member azul123's Avatar
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    Default Re: Even travel companies charging Credit Card surcharge

    A merchant is a merchant, be it Travel Agency or not, there will be a small percentage who goes to Travel Fair not deciding where to go and decide on the spot. I don't think many people go around with their cheque book in their pocket.

    ../azul123

  13. #13

    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by azul123 View Post
    there will be a small percentage who goes to Travel Fair not deciding where to go and decide on the spot.../azul123
    Yes there are people who go to travel fair and decide on the spot ... But do you know that they do not pay on the spot ??? Most of them leave a small deposit for the package and then go back to the travel agent office to make the full payment.

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    Senior Member azul123's Avatar
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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Long Thai Bean View Post
    Yes there are people who go to travel fair and decide on the spot ... But do you know that they do not pay on the spot ??? Most of them leave a small deposit for the package and then go back to the travel agent office to make the full payment.
    It's not a matter of whether I know or you know, whether it is fair for these merchants to charge that x% processing fee, isn't that the original question that we are seeking here?

    ../azul123

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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by azul123 View Post
    It's not a matter of whether I know or you know, whether it is fair for these merchants to charge that x% processing fee, isn't that the original question that we are seeking here?

    ../azul123
    the processing fee is from the CC, its all factored into the final price of the items u buy... those who paid by cash normally let the merchant earn additional profits unknowingly...
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    Senior Member azul123's Avatar
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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Del_CtrlnoAlt View Post
    the processing fee is from the CC, its all factored into the final price of the items u buy... those who paid by cash normally let the merchant earn additional profits unknowingly...
    Ok, let's summarise so we all have clear understanding of these charges.

    Say an item worth $1,000 if paid by cash, how much would be if paid my CC?

    It is my understanding that processing fee is a charge that CC company impose on the merchant and that the merchant pay for using the CC network because they are the merchant's bank and issuer bank involved that uses the CC network.

    My answer is $1,000 no more.

    ../azul123

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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by azul123 View Post
    Ok, let's summarise so we all have clear understanding of these charges.

    Say an item worth $1,000 if paid by cash, how much would be if paid my CC?

    It is my understanding that processing fee is a charge that CC company impose on the merchant and that the merchant pay for using the CC network because they are the merchant's bank and issuer bank involved that uses the CC network.

    My answer is $1,000 no more.

    ../azul123
    wats worth 1000 to you, may not be worth 1000 to a merchant.

    lets think of it this way... the item cost price 800, selling price 1000. profit 200, nice?
    then the merchant absorb the 3% service charge, so he pay 30 to CC, he still earn 170.

    so when big clearance, he selling the item at 850, suppose he is going to absorb cc, then his profit is 24.50, still ok to u, but what about his running cost etc? so the minimum he could go is profit of 50 for breakeven. what should he do?

    so my suggestion is valid... mark up to 880. if cash then offer a 3% off, still can earn approx 50 bucks. either way still a 50 bucks profit.

    my 2 cents from a merchant point of view.
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  18. #18
    Senior Member azul123's Avatar
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    Default Re: Even travel companies charging Credit Card surcharge

    Quote Originally Posted by Del_CtrlnoAlt View Post
    wats worth 1000 to you, may not be worth 1000 to a merchant.

    lets think of it this way... the item cost price 800, selling price 1000. profit 200, nice?
    then the merchant absorb the 3% service charge, so he pay 30 to CC, he still earn 170.

    so when big clearance, he selling the item at 850, suppose he is going to absorb cc, then his profit is 24.50, still ok to u, but what about his running cost etc? so the minimum he could go is profit of 50 for breakeven. what should he do?

    so my suggestion is valid... mark up to 880. if cash then offer a 3% off, still can earn approx 50 bucks. either way still a 50 bucks profit.

    my 2 cents from a merchant point of view.
    Mark up are common practise as that's how business make money, what I am saying is.. if you are paying $1000 by cash you should also pay $1000 by CC.

    Nobody in their right mind start negotiating a price by first saying "oh, I want to pay by credit card.." the merchant will mark up even more.

    If your cash price is $1000 then the CC charge should be $1000, merchant pays the CC processing fee and make less but he has more sale cos there are more people able to buy with CC than they have cash on them.

    The relationship is like this.

    Bank - makes from Merchant and CC holder, holder don't pay in full they make the interest they charge on CC Holder.

    Merchant - makes from the increased sales and also protected with some insurance against fraudulent transaction etc..

    CC Companies - the processing fee the charge.

    CC direct competition is cash, that is it... pure and simple.

    So don't be fooled by these merchants.. challenge them, report them, best is to call the CC and find out what are your rights.

    Now the merchants they too are not stupid, do you see anywhere in your bill stating CC processing fee? so in other words they can say the agreed price was actually $1020, so just be aware of these things and be a smart shopper.

    There is no distinction between a petrol pump merchant versus a Travel Agency merchant, if you don't pay processing fee from petrol pump then you shouldn't pay for processing fee at Travel fair.

    ../azul123

  19. #19

    Default Re: Even travel companies charging Credit Card surcharge

    the 3% processing charge is supposed to be borne by the merchant. This is stapulated in the contract when they undertake to have the payment system installed in their shop. say if the price is $1050 with gst, then if you pay by credit card, it should only be $1050. No more.
    you can try complaining to the payment network (Visa/MC) abt this and the payment network will take "appropriate" action. but i seriously doubt if they will take any effective action because so many merchants do that. And also so many cases go unreported.

    but on another note, its a matter of cost to the merchant. if they can have the customer pay by cash or NETS, why would they want to encourage the customer to pay by CC?

  20. #20

    Default Re: Even travel companies charging Credit Card surcharge

    So u mean Cathay Photo is wrong by adding the 3% when I pay by credit card?


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    Last edited by AReality; 18th December 2006 at 02:24 PM.

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