Cash is King, right?

Here’s a fantasy I have.  Retailers offer a 5% discount to individuals who pay in cash (and maybe by debit card).  Remember when gasoline prices were sky-high a couple of summers ago?  I remember some gasoline owners wanted to offer a discount to individuals who pay by cash.  Why?  Because of the fees the credit card companies charge retailers for allowing customers to purchase merchandise and services with a credit card.

It’s a domino effect.  Credit card companies persuade merchants to accept credit cards because customers purchase more with credit cards.  But, by accepting credit cards, merchants are charged a fee by the credit card company.  To recoup the costs of lost profits from the fees charged by the credit card companies, merchants increase the price of the goods and/or services they charge to customers.

So, if merchants refused to accept credit cards, meaning they don’t have to pay that fee to the credit card companies, merchants’ costs of doing business is lowered, which theoretically they would pass on to their customers.

Any merchants willing to thumb their noses at the credit card companies and either refuse to accept credit cards or give customers who pay with cash a discount?


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