In light of new CC convenience fees, would you use cash more often?

I already have switched to using cash more often. This morning I used cash for 3 of 5 purchases at our local farmers market because of CC fees.

Call me cynical, but since the prices in most hotels, restuarants, bars, and the like have already factored in the credit card fees, it appears to me to be just another case of sock it to the consumer. Much like the escalation of the suggested percentages for tips on the credit card slips and "shrinkflation".

I'm not about to BRING more cash to Europe. Walking around with a big wad of cash has its own set of problems that I don't care to deal with. I will continue to withdraw local cash as necessary from local bank ATMS (which may have their own fees). How much is a 3% convenience fee going to cost you on an average trip? €1000 charged to a card might have a convenience fee of €30. But how much would it have cost you from a poor exchange rate from your home bank, or service fees from the local ATM for that amount in cash? As far as I'm concerned, its not enough to warrant a change in my current payment methods.

My understanding is that in the EU merchants are not allowed to charge a credit card fee. All prices must be transparent. https://europa.eu/youreurope/citizens/consumers/shopping/pricing-payments/index_en.htm#inline-nav-1

In the US, it is legal to charge a fee in all but Connecticut, Massachusetts, Maine and Oklahoma. In Colorado the fee is limited to 2%. https://www.lendingtree.com/credit-cards/articles/surcharges-and-convenience-fees/

I haven’t noticed it in Europe, but it is gaining in popularity in the U.S. I have read articles that more people are using cash in restaurants because of the practice as well as those annoying tip screens in places where you simply order at the counter.

In the UK I noticed more restaurants adding an optional 10% to the bill, mostly in the larger cities.

it appears to me to be just another case of sock it to the consumer.

Or trying to remain profitable in a competitive market?

or service fees from the local ATM for that amount in cash?

There are banks that reimburse all service fees, including those overseas, essentially making local cash withdrawals from ATMs free. Because of this, we have gone with largely cash on travel. Obviously safety is the #1 concern with this strategy, so we are quite cautious. But we find cash in restaurants, bars, and museums to be hugely convenient otherwise, sidestepping that final step of a handheld device, currency questions, and yes, the increasingly insidious creep of tip lines. Also, I swear when you are pressed for time to catch a train or make a ticket reservation, the credit card process is -- by Murphy's Law -- at its slowest. It is nice to just lay down cash and go! One exception -- we still use credit cards in grocery stores.

Added note: As others have noted, we've taken largely the same strategy at home. It may seem counterintuitive to some, but cash is actually MORE convenient for us here in the US, for many of the same reasons, tipping most of all.

There are banks that reimburse all service fees, including those overseas, essentially making local cash withdrawals from ATMs free.

I live in Europe and 90% of my payments are with a US ATM card with rebated fees.

I have always preferred cash for minor transactions home and abroad. I don't think it's inherently unfair. The merchant has to pay a fee to the CC companies to use their service, so why not pass that cost on to the consumers openly rather than hidden in the price? Or, looked at from another way, all these years cash customers have been subsidizing the cost of those CC transactions by paying the same amount.

This recently cropped up as an issue here, where a certain restaurant chain announced a policy of deducting the 3%± fee from servers tips if they were put on a CC. It caused an uproar, but also doesn't seem unreasonable to me.

Stan, it does seem reasonable. Just free enterprise looking gor a profitable game plan.

You will probably be surprised to discover the most of the tourist rip off places that do this to you will probably not be able to take cash. Luckily, it is not where I travel a lot, but I actually left something on the counter at a store in Florida and as I walked out the door, he screamed at me he could waive the fee. (I ignored him.)

Whatever. Xxx

I prefer using cash as much as possible anyway, all the time. It keeps me on budget. Over 30% of all transactions in Germany are cash. They like it and so do I.
You do not have to carry big wads of cash with you all day long unless you are planning on spending all of it that day. I fail to understand why people want to use a CC for a bottle of water or a bratwurst for lunch.

Good Morning All,

@TC - I agree this should already be factored into a business' pricing. It's not like these fees are a new expense for them, they have been around for years.

@CJean - At this point where the practice was mainly in restaurants, you're right, for us we spent $1900 on food this, so the fees would have been less than $60, not enough to make a change at this point.

@Trotter - "It is legal to charge a fee in all but Connecticut, Massachusetts........" Maybe I should just stay home and I won't have to worry about it? :p)

@History Traveler and Mr. E - "There are banks that reimburse all service fees." Yes, and I have a brokerage account with one of them. Time to add the checking and obtain their ATM card!

The funny thing is, I used cash more pre-pandemic, but between the ease of ApplePay and in some countries travelled post-pandemic where many businesses no longer accept cash, I feel now that they have us habituated to using cc, they've decided to punish us for it. As I noted above, I consider this a cost of doing business and should be factored into the pricing model, not added as an additional fee. Just my opinion.

If you think it should be factored in to the pricing, then you obviously pay with a card.
If you appreciate the discount, then you obviously pay with cash.

Not going to fault a business that says, "hey, the cash customers arent costing me anything extra so I am not going to charge them anything extra."

Sorry Mr E - I love reading your posts as they bring much humor to my day. However, "Not going to fault a business that says, "hey, the cash customers aren't costing me anything extra so I am not going to charge them anything extra." I must ask then, do we apply this same logic to Medical and Homeowner insurance pricing? I know that would save me a bundle.

Respectfully,

Joann

I have been basically cash less for years now. Allowed me to downsize to a small card holder, as all I need to have with me is a credit card, my ID and my transport pass.

When I still carried cash I always ended up with lots of coins that are weighing down my trouser pockets.

Generally speaking if I see a place that advertises "cash only" they will have to go without my business. Haven't seen that in Switzerland in ages, but I hear that still exists in Germany (but then Germany is no longer example to follow it once was...)

I find it odd for a business to charge for card use. After all, handling cash costs money too. A few years ago I was in a bar in Denmark, together with a German. When we settled our bills I paid by card, and the German paid in cash. The bar tender was livid. So far everyone in the bar had paid by card. That single German paying by cash meant that he would have to count the cash before he closed in the evening, meaning that he would be home half an hour later.

I fail to understand why people want to use a CC for a bottle of water
or a bratwurst for lunch.

Because when I pay for a 1 CHF bottle with a 10,- CHF note I get a minimum of three rather heavy coins back. I am happy not having to keep all that metal jiggling around in my trouser pockets.

And when I pay by card the person selling me my lunch does not have to take of her gloves, take my money, and then put her gloves on again. I do not now how it is in your country, but here you are not allowed to touch food with the same hands you touch money with. Card, even for small sums, is so much faster.

Businesses are free to add all the charges they want, as long as they are disclosed up front. If I go to a restaurant and they want to charge $15 for a hamburger, plus a 4% fee to use a card, plus a "15% service fee", plus a "10% employee insurance fee"' plus still expect a 25% Tip, and of course 5-12% Sales tax...then I am free to tell them screw it, going to your competitor.

Businesses that penalize people who pay by card, will find card users (people who likely spend more than "cash customers") go elsewhere. It also shows a that the owner is a business person that does not understand the cost handling cash (all that handling, potential for "shrinkage", people's time to collect, count, deposit). Business people like that can't see past the end of their nose and usually do not last long, through their own mismanagement.

Much like my State, they charge a premium to use a credit card to pay for anything (water bills, car registrations, etc) but think nothing of taking cash and checks, and all the people they involve to count, account, deposit, then deal with returned checks. Just amazing.

I'm not seeing too many businesses doing that here in Michigan, but I doubt I'll change my habits. I find the convenience of credit cards well worth it. And we're doing three trips this year on points

Businesses are free to add all the charges they want, as long as they
are disclosed up front. If I go to a restaurant and they want to
charge $15 for a hamburger, plus a 4% fee to use a card, plus a "15%
service fee", plus a "10% employee insurance fee"' plus still expect a
25% Tip, and of course 5-12% Sales tax...then I am free to tell them
screw it, going to your competitor.

In Europe that would actually be illegal. The list price, listed on the menu, should include all charges and taxes. It is up to the business to make sure that the list price of an item covers all the costs and charges, and leaves them with the margin they want.

When I moved to Bern in 2007 I started to frequent a bakery in my neighbourhood that had very nice pastries and sandwiches. They had a sign at their entrance with "please pay by card". And they explained why they wanted you to do that.
In short: It was because it saved them a lot of money. And that (amongst other things) allowed them to keep prices reasonable.

Shops should not charge for card use. They should give a rebate.

The biggest saving apparently was that they had a lot less of sickness related absences. Cash is a disease vector. By reducing or eliminating cash they had their personal fall sick less often. This is also why during the pandemic a lot of businesses went to cash only.

Joan, all my large payments like rent and electric and insurance did want to charge me a fee if I used a credit card. But direct withdrawl was free.

I am happier with a restaurant doing it because I have a choice to go some place else. With the electric bill, no choice.

Glad the humor feĺl on at least two receptive ears (assuming, cause I am deaf in one ear from shooting guns). Many don't have your appreciation. But I look for the lighter side of everything ... is how I stay sane.

I guess Europe is different.

For utility bills the standard means to pay them has always been bank transfer. And that has been like that as long as I have been alive. Any bills we get (from eg. builders, as we are renovating) always are paid via bank transfer. For that reason businesses typically include their bank account details on their letterhead.

”When I still carried cash I always ended up with lots of coins that are weighing down my trouser pockets.”

That’s been my excuse to go to the gelato shop routinely and use up my coins. : )

One of the gelato shops in Spain last month specifically thanked us for paying with cash.

Wengenk, direct draws are fairly common in the US. You sign up and the company draws it automatically. But Real bank transfers are not too common in the US as part of daily life.

In the UK consumer credit cards, debit cards or charge cards can't be surcharged. Nor can electronic payment services such as PayPal. Cash and cheques can be but only to cover costs of the business to process that method of payment, and this needs to be disclosed up front.

That’s been my excuse to go to the gelato shop routinely and use up my
coins. : )

And then you hold up the line at the gelato shop while you are counting out your coins, while the gelato shop owner wishes you would pay by card, as he could have served 2 more customers in that time.

Wengenk, direct draws are fairly common in the US. You sign up and the
company draws it automatically.

We have that too. But I now mostly use e-bill. And that is great, as this still gives me flexibility as to which bank account I pay from. I have accounts with two different banks, and I see the e-bills in both their on line platforms. If I pay it via one bank, it also disappears from the other...

Europe is pretty much evolving to a cash less society. It has already been the case for half a century that you could not function without a bank account.

@WengkenK and Paul - yes it does cost money to process cash. In addition to those you already mentioned, in another lifetime I processed deposits for the small firm I worked for. CC’s were easy, just press a couple of buttons at the end of the day, checks required a little more but we had a scanner so still not bad. Cash, however, meant completing an actual deposit slip and taking time out of the office to walk to the bank. Luckily we didn’t have too many cash payments, even back then.

@ Mr E - “Glad the humor feĺl on at least two receptive ears (assuming, cause I am deaf in one ear from shooting guns). Many don't have your appreciation. But I look for the lighter side of everything ... is how I stay sane.”

Now see, that made me chuckle. An in-person conversation between us might be pretty amusing to witness, as I have “a very unusual hearing loss” to quote my doctor, hearing low tones out of one ear and high out of the other. Always interesting when I meet new people.

As far as credit card and bank fees, only my Town charges a fee whether you use CC or bank transfer, although the fee is smaller for bank transfer which is what I use for the RE taxes. Everything else I pay through regular online billpay.

I am pretty backward on this. I now live in a place where everyone does bank transfers for everything. How have I done bank transfers in the past? I call my banker and tell him to transfer $X to so and so, I emailed you their bank information. Other than that, never done it.

But every bill i have but my local telephone is auto pay so i never mess with bills. Shopping 90% ATM tap card. Hate waiting for people trying to make their IPay or Google Pay work. 10% cash.