The hidden 3% sales tax
Posted by: MangoMonkey on 05 October 2013
Thoughts?
The cost of transferring money is not a tax. A tax is levied by the government to finance government in providing public services and works.
The cost of handling money transactions is a commercial cost for trade. Handling cash is actually more expensive overall than the credit card levy to retailers.
And you are quite right, the cost of handling the banking aspect of trade has always been born by the end purchaser. Just like paying for your retailers to make VAT returns for example, or heating the shop and advertising.
ATB from George
The cost of transferring money is not a tax. A tax is levied by the government to finance government in providing public services and works.
The public are taxed, and the tax coffers are used to bail out the bankers, who in turn continue to award themselves big fat bonuses…
The charge for credit cards, currency exchange etc is finance industry tax which goes strait to bankers, who in turn continue to award themselves big fat bonuses…
It’s all tax and the end game is exactly the same : (
Sorry, George - couldn't ressist it! : >
Debs
Handling cash is actually more expensive overall than the credit card levy to retailers.
If this is indeed the case, why do many small shops and businesses have a minimum purchase of around £10 for credit/debit card purchases but no minimum purchase for cash?
Mark
Handling cash is actually more expensive overall than the credit card levy to retailers.
If this is indeed the case, why do many small shops and businesses have a minimum purchase of around £10 for credit/debit card purchases but no minimum purchase for cash?
Mark
Some transactions [debit] charge a flat fee ~.25 - .50 USD per transaction. This is also why retailers love taking debit cards vs. credit.
Recent transaction not music related - I was told debit card fine but using credit card would be 1% fee - but they took Amex which gives me a 1.5% cash back next month
In the UK a debit card use does not carry any charge at all. It simply transfers money that is available balance from an account, it’s a bit like a modern instant electronic version of using a cheque.
A credit card transaction is charged because the money is temporarily borrowed [and secured] from a bank, and which needs to be repaid later from the holders available funds from an account.
Debs, just to clarify. I think you are referring to what the costs are to the purchaser, rather than those charged to the retailer.
IIRC banks charge the retailer each time a debit card is used. Below a certain price the transaction will become a loss for the retailer. Cash payments can be lumped together, before paying into a bank, and therefore will be charged on the total lump sum paid in. Hence the restriction on minimum spend. Personally I don't really understand why people use cards for very small payments. Using cash makes me realise how much I am actually spending on little things.
John