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[OM] Re: [OT] Paypal charges, was interesting items still getgood prices

Subject: [OM] Re: [OT] Paypal charges, was interesting items still getgood prices
From: "Alan Barrow" <pinzgauer@xxxxxxxxxxxxx>
Date: Sun, 7 Nov 2004 15:47:12 -0500

Simon writes about laws about credit card surcharges:

> I'd love to know who lobbied for that law.

Actually, it's been a condition of accepting Visa/MasterCard since at least
the 70's. IE: If you want to accept the cards and display the logo you have to
abide by the card issuer's conditions. And one of those is that vendors cannot
charge the consumer more for a card purchase. The intent is to make usage of
the card by a consumer no different than cash, etc.

The vendors, while they complain, do receive some protection over accepting
checks, etc, the consumers receive protection (able to contest charges for bad
service/products), etc. So they get far more business for that fee than they
would without.

There are also many other conditions that are not as well known. Such as MC's
"Honor all cards" policy. Which forbids vendors from requiring driver's
license, signature match, etc. I actually talked with a VP at MC about an
issue with the post office and signature panels. He indicated that they do not
expect sales clerks to be handwriting experts, and most stolen cards are not
caught by signatures anyway. Nor by requiring photo ID, etc. All those are
easy to bypass/forge.

Notification of stolen cards, then canceling them is the only effective method
of fraud prevention. So MC's approach is to not burden the honest consumer
with a hassle that really is not very effective anyway.

Which I'm starting to be very sensitive to. I had to have a power chat with a
BestBuy manager because their anti-theft measures and policies were really
starting to get intrusive. You can reach a point that you chase off honest
customers at a greater loss than the "shrinkage"/theft was to start with.

Back to the credit charge vendor fees, they are no longer fixed for most
non-paypal accounts. It's usually tiered based on an average purchase amount
and overall volume. Small purchases work against low volume vendors, thus the
$10 minimum you see at some places. Likewise, you'll also see "prices reflect
3% cash discount" signs, which is technically allowed though discouraged.
Paypal does pay a fee to process visa/mc, so it's legit to charge for it just
like any other credit card processor for small businesses.

Have fun!

Alan


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