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  #1  
Old 08-09-2013, 08:07 AM
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is it illegal to charge less if the customer pays in cash?

I remember a while back in gas stations. There was a different price (higher) if you paid with a credit card.

In my little mower side business, I charge $80 for a repair. Would it be illegal to charge $75 if they pay in cash? The income is fully reported on my schedule C either way (cash or check).

what do y'all think?

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  #2  
Old 08-09-2013, 08:14 AM
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I think it varies by state. But why? Is it an incentive to get people to not use credit cards?
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  #3  
Old 08-09-2013, 08:27 AM
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It's the credit card companies that absolutely prohibit this practice. If the merchant accepts a credit card, he agrees to charge the same price for the card as he does for cash.

How in the hell the gas stations get away with different pricing is beyond me. The CC companies would pull their card capability if they found out.
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  #4  
Old 08-09-2013, 08:41 AM
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Quote:
Originally Posted by Brian Carlton View Post
It's the credit card companies that absolutely prohibit this practice. If the merchant accepts a credit card, he agrees to charge the same price for the card as he does for cash.

How in the hell the gas stations get away with different pricing is beyond me. The CC companies would pull their card capability if they found out.
They have to know, it is pretty commonplace. Cash discounts are usually not illegal, nor are % discounts for early pay on accounts. We should all try to pay cash only for a while, just to jostle the giants....screw 'em...
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  #5  
Old 08-09-2013, 09:02 AM
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I have heard to get around it you charge the same amount for the service you performed but add a handling fee or call it a service charge only on customers that use CC.
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  #6  
Old 08-09-2013, 09:16 AM
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Quote:
Originally Posted by benhogan View Post
I remember a while back in gas stations. There was a different price (higher) if you paid with a credit card.

In my little mower side business, I charge $80 for a repair. Would it be illegal to charge $75 if they pay in cash? The income is fully reported on my schedule C either way (cash or check).

what do y'all think?
Think spud is on the right track, same charge for the same work, but the cash customer gets to skip out on additional service fees.

Not sure if I would post it in a sign... maybe tell people when they leave the machine that there are additional fees to cover the use of credit cards.
Pretty sure most people understand that the merchant is subject to extra fees, I mean, we all buy fuel....

For me, when I go into a small business, I volunteer right off the bat that I will be paying cash, and have no need for any receipt.
Most small business owners love that...


BTW... lemme know if you ever come across a Walker 42" GHS mower deck.... I'll pay cash.
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  #7  
Old 08-09-2013, 09:30 AM
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Every time I have someone request cash, its always a contractor or something trying to get around reporting some income. I've stopped dealing with people who've made this an endless process, especially if I'm paying for something via company money. The amount of income and sales tax fraud that goes on between small businesses is incredible.
Its no wonder the IRS is the biggest organism of government. What I find irritating is the pretty universal statement that they are saving me money as a customer, when they are actually creating a bigger hassle for me if the amount spent is over 600 or something. Can't remember the threshold for reporting, but somewhere around there
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  #8  
Old 08-09-2013, 09:59 AM
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Interesting posts, having worked for several major banks I can say this:

The banks have slowly promoted the use of credit cards over cash for years. They want you to use plastic whenever possible. To a banker, cash is the devil while plastic credit cards are manna from heaven. A credit card issuer gets to charge interest whereas there are NO interest charges for a cash purchaser.

The banks and credit card issuers have mounted a slow but effective marketing campaign over the past twenty years that is working. Visa and Mastercard rule the day. What is the number one cause of debt and bankruptcy in this country? Medical bills and Credit Card debt. Banks love you being in debt to THEM. When you owe a bank, the bank owns YOU. On your knees, SLAVE.

A cash customer must be a criminal while a credit card customer is a saint from heaven. Cash customers must be trying to hide something whereas a credit card customer has nothing to hide.

Cash Customer = Bad dog
Credit Card Customer = Good dog
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  #9  
Old 08-09-2013, 10:03 AM
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Quote:
Originally Posted by Brian Carlton View Post
It's the credit card companies that absolutely prohibit this practice. If the merchant accepts a credit card, he agrees to charge the same price for the card as he does for cash.

How in the hell the gas stations get away with different pricing is beyond me. The CC companies would pull their card capability if they found out.

In my state, all one has to do is to post a notice and they can bill differently for cash/debit/credit.
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  #10  
Old 08-09-2013, 10:06 AM
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Originally Posted by link View Post
In my state, all one has to do is to post a notice and they can bill differently for cash/debit/credit.
My curiosity is why the CC companies don't enforce their own policies under certain conditions...........conditions that are unknown to me at the present time.
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Old 08-09-2013, 10:07 AM
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Originally Posted by HuskyMan View Post
Interesting posts, having worked for several major banks I can say this:

The banks have been slowly promoting the use of credit cards over cash for years. They want you to use plastic whenever possible. To a banker, cash is the devil while plastic credit cards are manna from heaven. A credit card issuer gets to charge interest whereas there are NO interest charges for a cash purchaser.

The banks and credit card issuers have mounted a slow but effective marketing campaign over the past twenty years that is working. Visa and Mastercard rule the day.

A cash customer must be a criminal while a credit card customer is a saint from heaven. Cash customers must be trying to hide something whereas a credit card customer has nothing to hide.

Cash = Bad dog
Credit Card = Good dog
I was referring to cash vs check personally. I prefer not to purchase things with a credit card apart from online to build my air miles related to personal finance.
My experience from a business end has been that endlessly people want to be paid cash vs a company check with a business purchase when its like 2k or lower, and in that circumstance, there is usually a blatant statement saying they will drop the sales tax charge if I do cash, ect ect. Its usually pretty clear that this payment is off the books 'wink wink'.
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  #12  
Old 08-09-2013, 10:07 AM
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Originally Posted by link View Post
In my state, all one has to do is to post a notice and they can bill differently for cash/debit/credit.
x2, gas stations around here sometimes have that sign
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  #13  
Old 08-09-2013, 10:18 AM
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Originally Posted by JB3 View Post
I was referring to cash vs check personally. I prefer not to purchase things with a credit card apart from online to build my air miles related to personal finance.
My experience from a business end has been that endlessly people want to be paid cash vs a company check with a business purchase when its like 2k or lower, and in that circumstance, there is usually a blatant statement saying they will drop the sales tax charge if I do cash, ect ect. Its usually pretty clear that this payment is off the books 'wink wink'.
I edited my original post, please reread. Everything comes at us from a different and unique vantage point. The Banks began a slow but effective marketing campaign when the first Diners Club charge card came into existence. They saw the advantage in getting people to say 'charge it' versus using cash. It is, after all, so easy to say, isn't it? Then, they set up merchants accounts with business owners which earns the bank an additional fee. So, the bank gets it twice, by a merchant account fee and the carrying charges and interest fees on the purchaser/customer.

IF you were a banker, which would you want? Cash customer which makes you very little or credit card customer? I know which one I would choose. There was a time when there was no such thing as a "Credit Card". Banks simply had to make it on consumer lending, car loans, house loans, etc. BUT, when credit cards came along, the banks saw an opportunity to NAIL EVERYBODY BUSINESS OWNERS INCLUDED in the form of merchant account credit card fees.

Your neighborhood bank known as "First National Bank of BILLING".



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  #14  
Old 08-09-2013, 10:20 AM
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Originally Posted by Brian Carlton View Post
My curiosity is why the CC companies don't enforce their own policies under certain conditions...........conditions that are unknown to me at the present time.
Huh?
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  #15  
Old 08-09-2013, 10:50 AM
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Quote:
Originally Posted by JB3 View Post
Every time I have someone request cash, its always a contractor or something trying to get around reporting some income. I've stopped dealing with people who've made this an endless process, especially if I'm paying for something via company money. The amount of income and sales tax fraud that goes on between small businesses is incredible.
Its no wonder the IRS is the biggest organism of government. What I find irritating is the pretty universal statement that they are saving me money as a customer, when they are actually creating a bigger hassle for me if the amount spent is over 600 or something. Can't remember the threshold for reporting, but somewhere around there
How is reaching your hand out and taking $601.00 in cash anymore of a hassle than taking a customers credit card swiping it getting them to sign and then giving them the receipt. On the issue of small business involved in tax fraud, they will for sure spend it quicker and more efficiently than any government would which generates more economic activity or growth.

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