Everyone hates the "REWARDS CARD RATE"

Everyone hates the “Rewards Card” rates because…well, why should the merchant and consumer be paying for a reward offered by Visa or Mastercard? Most consumers use their rewards card for the higher dollar purchases, but you will see some usage based on your business model and locality of your business. Interchange cost for Rewards cards are:

CPS I Rewards I 1.65% plus $0.10
Consumer Traditional Rewards card that meet existing requirements for CPS/Retail, CPS/Supermarket, CPS/Retail Service Station, and CPS/Automated Fuel Dispenser. Transactions processed from Visa Signature or Infinite cards by NON-T&E merchants. Maximum 2 days to deposit & settle.

CPS I Rewards 2 1.95% plus $0.10
Consumer Traditional Rewards card that meet existing requirements for CPS/Card Not Present, CPS/Retail Key Entry, and CPSIE-Commerce Basic. CPSIE-Commerce: Hotel/Car Rental, & Passenger Transport, CPSI Hotel/Car Rental: Card Present!Card Not Present, and CPS/Passenger Transport and CPS/Restaurant. Signature and Infinite cards that meet existing CPS/Card Not Present, CPS/Retail Key Entry, and CPSIE-Commerce Basic by NON-T&E merchants. Maximum 2 days to deposit & settle.

Yup. Hate the reward card rate. Nice for them to promote their card at the merchant’s expense. Now, if the rate was the same across the board, I would not care what they want to do to promote their business.

You didn’t really answer your question - why should a merchant pay for the reward card?

Is the answer “because people use those card are higher dollar purchases?” If so, I submit that is no answer - I’d still ask, why should the merchant pay for rewards?

Do you have any data to back up that claim? I’ve never seen someone pull our a rewards card and then say “oh wait, it’s only $11.63? let me use my non-rewards card instead…”. Anyone I know with a rewards card uses it exclusively - to get the rewards - no matter how large the purchase.

[quote=“SolutionsGal”]
Everyone hates the “Rewards Card” rates because…well, why should the merchant and consumer be paying for a reward offered by Visa or Mastercard?

It was a rhetorical question! We all know the reason we accept not only Rewards Cards but all Credit/Debit cards is because it is the consumers choice of payment, and without consumers, we all close our doors for good. BTW, we also accept cards for payments at our business so we also have to pay the same fees that you pay.

I know that MasterCard and Visa track data on card usage based on card type. And if it would be of use for you personally, I will be glad to get the data for you. I can tell you based on what we see on merchant statements, the majority of transactions today are moving to debit purchases, particularly on low ticket amounts. In addition, from my own buying habits, I would never pull out my rewards card to pay for a $11.63 purchase, and I think I’m kind of an average consumer. The easiest way for a merchant to find out the relevance of this category in regards to their business is for them to pull out their processing statement and look at it, all the information about what their business is doing is right at their fingertips.

Lets look at this.

I have a product, a VISA card. I want you to use my VISA card. I charge merchants a fee when my customers use my VISA card. That’s something we have to live with under this model.

But, let’s say I want to step things up a bit, and get more people to use MY VISA card, so I’m going to offer them rewards, cash back, whatever so they will choose my VISA card over another. But, instead of paying for those rewards myself, heck, I’m just going to pass that cost on to the merchant.

Here is a hypothetical question - why doesn’t VISA create a rewards card where you get 10% cash back - and just bump the rate on that card to 11%? Everyone would want that card! And there is nothing we could do about it, right? Because our contracts all state that we must take every VISA card.

We would ALL be standing in line to get that card! I’m not certain that Visa/Mastercard see things as clearly as you or I do, if only they did, we would all be happier and our pockets a little heavier!

you know the answer to this before you typed it - because they can and because we have to.

I pay someone to process my card payment, I pay someone to process my cash - its a b***h either way but thats the way the world is so I try and find the best provider for me (cost/service) then I get down to business upsell a few side orders and I’ve more than covered the days costs and every one is happy!

In addition, from my own buying habits, I would never pull out my rewards card to pay for a $11.63 purchase, and I think I’m kind of an average consumer.

I guess I’m far from the average consumer as I do not carry a debit card at all and use one of my three rewards credit cards at probably 95% of my retail transactions. If I stop at a jiffy store to buy a bottle of coke and a newspaper, goes on my AMEX. Stop at Home Depot for a screwdriver, Goes on my Visa. Why would I give up getting those 3% and 5% rewards and use a debit card?

On a similar note, a local credit union is offering a nicke per transaction every time you use your debit card as a “credit” transaction. They get to charge more if you don’t use your PIN so now they are pushing the consumer to do just that. Still doesn’t amount to the rewards that I get from the other cards.

[quote]
If I stop at a jiffy store to buy a bottle of coke and a newspaper, goes on my AMEX. Stop at Home Depot for a screwdriver, Goes on my Visa. Why would I give up getting those 3% and 5% rewards and use a debit card?

[quote]

So you are the guy that every merchant complains about because you use your card for a $2.00 purchase. I have been told that I am overly sensitive ( by my family) because I think it is crazy to use a card for every single purchase. My adult children NEVER carry cash and I don’t understand it, perhaps it is because I am in “the business” and I know how credit cards impact every merchant. The whole point of this information was to let the members on PMQ, who may not be as well educated as some of you are, understand how Interchange works and how to get the best possible rates available. The well used words “Knowledge is Power” hold great value. As business owners, we will never be able to control how our customers pay us, ( unless of course we go to a cash only system), but we can control to some degree, what we pay to accommodate our patron’s payment methods.

I intentionally pay cash to the small businesses I patronize.

So I go to a supplier (not my major one, but one I use maybe 300 every month at will call.
This is the supplier that was getting 3000 a week but because of horrible customer service I am now with someone else.
I called in my order went to pay for it and pulled out my debit (order was only like 250.00) and the gilr said it is an EXTRA 10 dollars to use any cc or debit now. I simple walked out…REALLY
How can they get away with this?

Where I live, Sao Paulo, most merchants will give you a discount if you’re paying in cash. That’s how I plan to do once I open up my shop.

Marking up your prices for those paying by debit/visa is fair more insulting than offering a discount for cash, even though it amounts to the same thing if the vendor’s planned ahead.

My dad had a GM Rewards card. You earned 5% or something towards a new car. Since he had great credit, he had like a $50,000 limit or something impressive. So he goes into Cadillac, negotiates a great price on a new Caddy, then whips out his credit card to pay for it. :lol: The salesman just stared… then said he would have to get the manager. The manager balked at taking his credit card. They finally made some kind of deal for him to write a check. The innocent look on my Dad’s face as he presented a credit card to pay for it was priceless. He was not trying to be cocky or anything. He just figured it would be a good deal to earn 5% towards his next car. I think he should have pushed the issue.

They get away with it because no one has reported them to Visa/Mastercard.

IM NOT ABOVE MAKING THEM PLAY BY THE SAME RULES AS I DO. how do I go about it?

http://www.bankrate.com/finance/auto/sa … -card.aspx

Your father most likely could have forced their hand and won if he truly wanted to.

I will get you the phone number on Monday!

Here is the number to call to complain about a merchant surcharging. You will need to have the name of the business and their phone number along with your Visa card number.

1-800-847-2911
press 1 for English
press 4 for other inquiries

Mastercard has an online complaint site to use.

http://www.mastercard.com/us/personal/e … tions.html