“Reasonableness” is the operating principle. Can’t force a car dealer to accept a dump tuck full of pennies as payment when large denomination bills are available
Totally agree. I was going to make the same argument. Cash is legal tender for all debts. It should be acceptable no matter what. I tend to be more libertarian minded in some respects when it comes to economics but I find myself agreeing almost totally with the young lady’s position. I’d pump the brakes a little on what she was saying but her point about a homeless person who has cash being turned away is as good as it gets and one that I use myself when debating this point (I’m one of the few people in my circle who tries to pay primarily with cash when out and about and gets criticized for it.) Cash is legal tender and should be accepted everywhere, period.
The “reasonableness” principle does make sense, however. The larger the purchase the more inane it can be to pay in cash. This point is where the “homeless man” defense falls apart a little. As for smaller purchases at large venues and events, as the young lady also cited, many if not most stadiums, arenas, and amphitheaters are going to exclusively carded transactions. I wasn’t happy about that when my local NFL venue (Buffalo) started requiring that but as I saw how much quicker it was to get a beer or some pizza from the concession stand I realized it was very likely more to improve the speed of transactions rather than some nefarious technocratic rule. So in that instance I can understand, when tens or hundreds of thousands of people are at a single location making purchases, the ability to keep the line moving would qualify the “reasonable” test, I’d imagine.
But overall I think the fact that the US government issues a national currency in cash and coin, those forms should be legally acceptable by all businesses in normal (non-stadium event sized) conditions. I see no real legal argument to allow a business to deny cash as an acceptable form of currency.
I think it should be something that all businesses accept. Digital forms of currency can be hacked or accessed through the internet. We shouldn’t assume that blockchain will solve the problems of digital currency.
We got to this point by encouraging businesses to bury credit card transaction fees in their prices. Because fees are assessed on the retailer rather than directly on the purchaser, most businesses build the fees into their general prices, resulting in a HIDDEN PRIVATE TAX for cash payers. Obviously, credit card companies benefit from this arrangement because all consumers have become conditioned to paying these fees.
First, if our national government issues a currency, all businesses should be required to accept it as payment. (full stop)
Second, we must RESTORE CHOICE by legally requiring businesses to assess credit card transaction fees only on card purchases and to itemize those fees on retail receipts. Some consumers, perhaps many, will opt to pay in cash — especially, on large purchases. Even if we still opt to pay by card, we will have a choice; an informed choice.
Enforce transparency and the market will regulate itself.
Speaking of which, I actually have a credit card "concierge". He helps me deal with all things credit card related. Here's his podcast: https://hurdygurdytravel.com/ He's saved me literally tens of thousands of dollars.
You’re engaged in spreading and slippery slope and straw man errors. Find someone else to debate Dodd-Frank, CFPB and general pricing philosophy.
I will however indulge you on some of the issues you raised above but only as they relate to my original proposal:
The costs of cash transactions are static and actually diminish relatively as revenues increase. My current clients now and previous employers had to cash out each day. For a small business, it requires a single employee less than an hour to run the numbers, followed by a single bank run to deposit the day’s receipts. Regardless of the day’s haul, it costs them roughly the same for their employee’s labor. Simple economy of scale here: More cash revenues translate into relatively diminishing fixed accounting costs. No new burden for the business owner, other than increased security if/when revenues get high enough. And that is also a fixed cost that begins immediately to diminish relative to revenues as the business grows. But don’t forget that businesses must also account for the credit card receipts at day’s end, so it’s not a cost that needs to be separated from cash accounting when pricing — it’s a wash in that regard. BUT secure storage (read: physical square foot real estate) and proper destruction of credit card receipts are crucial aspects of protecting sensitive customer information & ensuring compliance with data privacy regulations, and those do incur additional ongoing costs. Charging cash customers for those costs does impose yet additional burdens on them but my proposal recognizes the complexity of sussing them out only for credit card customers (I suggest no attempt to ID and isolate those costs - they’re different per business and would incur the very burdens you fear). Yet it is worth noting that any related costs for cash are less: just a daily 10 min trip to the bank a block away and potentially some physical security (my clients carry a gun). But hey, you want to compel businesses to build that into only the cash price as some kind of punitive quid pro quo when my proposal gives them a pass on the above storage, security and destruction costs? Fine. Now who is imposing burdens on businesses?
To my actual point: there is no economy of scale advantage for credit card transaction fees — unless the card company offers volume discounts. Even then, with increased revenues their total increases at the new discounted rates. Passing these fees on to all consumers still imposes an unfair burden on cash payers.
By the way, the charges are ridiculous and complex:
As for loyalty programs. Those are a marketing gimmick to lure consumers into expanded card use with programs unrelated to the actual transaction service. The irony is that their administration costs drive up credit card transaction fees, so suggesting they are some kind of benefit that defers costs is economic naïveté. The entire loyalty system is designed to acclimate consumers into compliance with hidden costs and then lock them on to one card company by giving some of their money back in the form of a rebate (read: bribe) to the people who use cards.
Loyalty programs are the Koran in Mohammed’s formulation of “the Koran, the Tribute or the Sword” that helped him “convert” the Arab world. Card payers convert to the system. Cash customers pay the Tribute. And your disingenuous suggestion that customers can opt out of patronizing any business that builds credit card transaction fees into their general prices is akin to choosing Mohamed’s Sword. It is laughable to call such economic exile a choice.
But if you insist, I’d be curious whether you consider the same option offered to mask and vax refuseniks under our recent mandate regime to have also been a legitimate choice. If so, we have no common understanding of the word “choice,” and we cannot proceed because we cannot agree on terms.
In case you have actually read this far — I blame you that this has become so bloody long — I’ll just say directly that I would ban all loyalty programs, vendor rebates or any hidden non-value-adding third-party costs, including corporate taxes (as a libertarian, you should like this last one). They are parasitic market distortions.
What we know — and I know you know; and you know I know you know (sorry, just couldn’t resist) — is this: the credit card transaction fee rates are known. They can easily be programmed to charge and itemize for credit card transactions only. It’s a one-time programming task that incurs near zero additional costs for the business (hell, it’s probably a single line of accounting code). Any pretense of burden here is nonsense. Any suggestion that cash payers wouldn’t want the change is nonsense. Any suggestion that credit card holders wouldn’t appreciate seeing the itemization is nonsense. And any suggestion that cash payers have consciously negotiated that price with vendors is nonsense. Sophie’s Choice was no choice at all
I’ve made my case in detail and responded to your tedious objections. Feel free to rebut but don’t expect further response from me.
Sorry, but you are not “RESTORING CHOICE” when you force business at the point of a gun to assess credit card transaction fees.
Businesses can choose to give a discount for cash. Some in fact do.
A vanishing few are still cash-only.
Enforcing consumer transparency of prices consumers pay is very different than forcing businesses to assess credit card transaction fees and to itemize those fees.
By making it a law punishable by a fine or prison term, you are making it “controversial”.
You are saying that GOVERNMENT gets to decide how an exchange between consenting adults is consummated.
According to your logic, a merchant at a farmers market could no longer sell something for cash without an itemized receipt. Or a corner store selling a candy bar to a child. You don’t see that as a burden? On not only the vendor, but we customers who would have to wait in line a lot longer to pay for our purchases and get along to the next vendor.
And even your framing of “charging customers only for the services they use” is flawed and misleading. Vendors are in fact free to charge customers slightly different prices for cash versus credit if they so choose. Just because some/many/most vendors choose to price things the same for cash and credit customers does not mean that cash customers are being “charged” for a service they don’t use.
And customers are always free not to purchase!!
Now being transparent and crystal clear that you will charge *more* than a posted price to customers paying with a credit card, THAT I agree is a reasonable transparency law
The cost of the credit card transactions to the vendor is one of many, many costs, some per unit, some fixed, that each vendor has.
Further, you have no information on the actual total cost to each different vendor of handling cash transactions, dealing with employee theft, robbery, bringing cash to the bank, etc. so you cannot actually know that the cost of the “pay with cash” “service” that you claim the cash-wielding customer is not using is!
Now if we are talking about a GOVERNMENT-mandated transaction fee, then I would be much more sympathetic to your argument for transparency.
Also with service fees, health care fees, etc. that more and more restaurants charge customers beyond the published prices on their menus, and at best showing in tiny print in non-obvious places until the bill comes.
Those are different cases than the internal costs of vendors who choose to accept credit cards, and claiming that you/government get to determine “what services each customer is using” and how vendors MUST price their goods and services.
Any such legally-required mandates do not “RESTORE” choice, they *restrict* choice. By definition.
Regarding “nanny state,” seems not everyone who uses the term understands it
Regarding transparency, according to classical free-market economic theory, increasing it is one of the three tasks of proper regulation (the other two are leveling playing fields and lowering barriers to entry for new market participants)
Proper regulation does indeed impose burdens but when government is limited to those three tasks, the benefits far outweigh the costs. Whether my suggestion is an appropriate exercise of that power is certainly open to debate. That we may have too many (bad) laws does not automatically disqualify discussion of new (potentially good) laws.
I strongly recommend Thomas Sowell’s two primers: Basic Economics, and Applied Economics
"THIS BILL IS GOOD FOR ALL DEBTS, PUBLIC AND PRIVATE."
Last time I checked, that was printed on U.S. paper currency. That should settle it.
Correct. That said, I've been told I can't pay in coins for some larger purchases. My guess is that that's illegal.
“Reasonableness” is the operating principle. Can’t force a car dealer to accept a dump tuck full of pennies as payment when large denomination bills are available
I should say it’s probably the operating principle
Just speculating
Yeah, coins don't say that on them.
Totally agree. I was going to make the same argument. Cash is legal tender for all debts. It should be acceptable no matter what. I tend to be more libertarian minded in some respects when it comes to economics but I find myself agreeing almost totally with the young lady’s position. I’d pump the brakes a little on what she was saying but her point about a homeless person who has cash being turned away is as good as it gets and one that I use myself when debating this point (I’m one of the few people in my circle who tries to pay primarily with cash when out and about and gets criticized for it.) Cash is legal tender and should be accepted everywhere, period.
The “reasonableness” principle does make sense, however. The larger the purchase the more inane it can be to pay in cash. This point is where the “homeless man” defense falls apart a little. As for smaller purchases at large venues and events, as the young lady also cited, many if not most stadiums, arenas, and amphitheaters are going to exclusively carded transactions. I wasn’t happy about that when my local NFL venue (Buffalo) started requiring that but as I saw how much quicker it was to get a beer or some pizza from the concession stand I realized it was very likely more to improve the speed of transactions rather than some nefarious technocratic rule. So in that instance I can understand, when tens or hundreds of thousands of people are at a single location making purchases, the ability to keep the line moving would qualify the “reasonable” test, I’d imagine.
But overall I think the fact that the US government issues a national currency in cash and coin, those forms should be legally acceptable by all businesses in normal (non-stadium event sized) conditions. I see no real legal argument to allow a business to deny cash as an acceptable form of currency.
I think it should be something that all businesses accept. Digital forms of currency can be hacked or accessed through the internet. We shouldn’t assume that blockchain will solve the problems of digital currency.
All physical item businesses should accept cash.
We got to this point by encouraging businesses to bury credit card transaction fees in their prices. Because fees are assessed on the retailer rather than directly on the purchaser, most businesses build the fees into their general prices, resulting in a HIDDEN PRIVATE TAX for cash payers. Obviously, credit card companies benefit from this arrangement because all consumers have become conditioned to paying these fees.
First, if our national government issues a currency, all businesses should be required to accept it as payment. (full stop)
Second, we must RESTORE CHOICE by legally requiring businesses to assess credit card transaction fees only on card purchases and to itemize those fees on retail receipts. Some consumers, perhaps many, will opt to pay in cash — especially, on large purchases. Even if we still opt to pay by card, we will have a choice; an informed choice.
Enforce transparency and the market will regulate itself.
Speaking of which, I actually have a credit card "concierge". He helps me deal with all things credit card related. Here's his podcast: https://hurdygurdytravel.com/ He's saved me literally tens of thousands of dollars.
You’re engaged in spreading and slippery slope and straw man errors. Find someone else to debate Dodd-Frank, CFPB and general pricing philosophy.
I will however indulge you on some of the issues you raised above but only as they relate to my original proposal:
The costs of cash transactions are static and actually diminish relatively as revenues increase. My current clients now and previous employers had to cash out each day. For a small business, it requires a single employee less than an hour to run the numbers, followed by a single bank run to deposit the day’s receipts. Regardless of the day’s haul, it costs them roughly the same for their employee’s labor. Simple economy of scale here: More cash revenues translate into relatively diminishing fixed accounting costs. No new burden for the business owner, other than increased security if/when revenues get high enough. And that is also a fixed cost that begins immediately to diminish relative to revenues as the business grows. But don’t forget that businesses must also account for the credit card receipts at day’s end, so it’s not a cost that needs to be separated from cash accounting when pricing — it’s a wash in that regard. BUT secure storage (read: physical square foot real estate) and proper destruction of credit card receipts are crucial aspects of protecting sensitive customer information & ensuring compliance with data privacy regulations, and those do incur additional ongoing costs. Charging cash customers for those costs does impose yet additional burdens on them but my proposal recognizes the complexity of sussing them out only for credit card customers (I suggest no attempt to ID and isolate those costs - they’re different per business and would incur the very burdens you fear). Yet it is worth noting that any related costs for cash are less: just a daily 10 min trip to the bank a block away and potentially some physical security (my clients carry a gun). But hey, you want to compel businesses to build that into only the cash price as some kind of punitive quid pro quo when my proposal gives them a pass on the above storage, security and destruction costs? Fine. Now who is imposing burdens on businesses?
To my actual point: there is no economy of scale advantage for credit card transaction fees — unless the card company offers volume discounts. Even then, with increased revenues their total increases at the new discounted rates. Passing these fees on to all consumers still imposes an unfair burden on cash payers.
By the way, the charges are ridiculous and complex:
https://www.forbes.com/advisor/business/credit-card-processing-fees/
As for loyalty programs. Those are a marketing gimmick to lure consumers into expanded card use with programs unrelated to the actual transaction service. The irony is that their administration costs drive up credit card transaction fees, so suggesting they are some kind of benefit that defers costs is economic naïveté. The entire loyalty system is designed to acclimate consumers into compliance with hidden costs and then lock them on to one card company by giving some of their money back in the form of a rebate (read: bribe) to the people who use cards.
But even the card users lose choice as their loyalty rewards spending is limited within narrower parameters than say, straight cash rebates (both of which carry ambiguous status with the IRS — one more potential burden for consumers: https://www.investopedia.com/ask/answers/110614/are-credit-card-rewards-considered-taxable-income-irs.asp)
Loyalty programs are the Koran in Mohammed’s formulation of “the Koran, the Tribute or the Sword” that helped him “convert” the Arab world. Card payers convert to the system. Cash customers pay the Tribute. And your disingenuous suggestion that customers can opt out of patronizing any business that builds credit card transaction fees into their general prices is akin to choosing Mohamed’s Sword. It is laughable to call such economic exile a choice.
But if you insist, I’d be curious whether you consider the same option offered to mask and vax refuseniks under our recent mandate regime to have also been a legitimate choice. If so, we have no common understanding of the word “choice,” and we cannot proceed because we cannot agree on terms.
In case you have actually read this far — I blame you that this has become so bloody long — I’ll just say directly that I would ban all loyalty programs, vendor rebates or any hidden non-value-adding third-party costs, including corporate taxes (as a libertarian, you should like this last one). They are parasitic market distortions.
What we know — and I know you know; and you know I know you know (sorry, just couldn’t resist) — is this: the credit card transaction fee rates are known. They can easily be programmed to charge and itemize for credit card transactions only. It’s a one-time programming task that incurs near zero additional costs for the business (hell, it’s probably a single line of accounting code). Any pretense of burden here is nonsense. Any suggestion that cash payers wouldn’t want the change is nonsense. Any suggestion that credit card holders wouldn’t appreciate seeing the itemization is nonsense. And any suggestion that cash payers have consciously negotiated that price with vendors is nonsense. Sophie’s Choice was no choice at all
I’ve made my case in detail and responded to your tedious objections. Feel free to rebut but don’t expect further response from me.
Sorry, but you are not “RESTORING CHOICE” when you force business at the point of a gun to assess credit card transaction fees.
Businesses can choose to give a discount for cash. Some in fact do.
A vanishing few are still cash-only.
Enforcing consumer transparency of prices consumers pay is very different than forcing businesses to assess credit card transaction fees and to itemize those fees.
Nothing controversial here
Where is the hardship in charging customers only for the services they use and in itemizing them?
By making it a law punishable by a fine or prison term, you are making it “controversial”.
You are saying that GOVERNMENT gets to decide how an exchange between consenting adults is consummated.
According to your logic, a merchant at a farmers market could no longer sell something for cash without an itemized receipt. Or a corner store selling a candy bar to a child. You don’t see that as a burden? On not only the vendor, but we customers who would have to wait in line a lot longer to pay for our purchases and get along to the next vendor.
And even your framing of “charging customers only for the services they use” is flawed and misleading. Vendors are in fact free to charge customers slightly different prices for cash versus credit if they so choose. Just because some/many/most vendors choose to price things the same for cash and credit customers does not mean that cash customers are being “charged” for a service they don’t use.
And customers are always free not to purchase!!
Now being transparent and crystal clear that you will charge *more* than a posted price to customers paying with a credit card, THAT I agree is a reasonable transparency law
The cost of the credit card transactions to the vendor is one of many, many costs, some per unit, some fixed, that each vendor has.
Further, you have no information on the actual total cost to each different vendor of handling cash transactions, dealing with employee theft, robbery, bringing cash to the bank, etc. so you cannot actually know that the cost of the “pay with cash” “service” that you claim the cash-wielding customer is not using is!
Now if we are talking about a GOVERNMENT-mandated transaction fee, then I would be much more sympathetic to your argument for transparency.
Also with service fees, health care fees, etc. that more and more restaurants charge customers beyond the published prices on their menus, and at best showing in tiny print in non-obvious places until the bill comes.
Those are different cases than the internal costs of vendors who choose to accept credit cards, and claiming that you/government get to determine “what services each customer is using” and how vendors MUST price their goods and services.
Any such legally-required mandates do not “RESTORE” choice, they *restrict* choice. By definition.
Methinks you work for a credit card company
nope
Not addressed to you, Peter, but appreciate your responsiveness
Nope. Just a libertarian/ classical liberal who thinks we’ve got too many f- ing laws now as it is.
And is annoyed by people who don’t understand the concept of unintended consequences.
We don’t need to make the nanny state even more of a nanny state.
Regarding “nanny state,” seems not everyone who uses the term understands it
Regarding transparency, according to classical free-market economic theory, increasing it is one of the three tasks of proper regulation (the other two are leveling playing fields and lowering barriers to entry for new market participants)
Proper regulation does indeed impose burdens but when government is limited to those three tasks, the benefits far outweigh the costs. Whether my suggestion is an appropriate exercise of that power is certainly open to debate. That we may have too many (bad) laws does not automatically disqualify discussion of new (potentially good) laws.
I strongly recommend Thomas Sowell’s two primers: Basic Economics, and Applied Economics