How Much More Are You Willing to Pay to Use a Credit Card?

If you have used a credit card to pay a service provider or government agency, you've probably had to pay a "service fee" or surcharge for the privilege. It has typically been less common, however, to see a credit versus cash price differential in a retail setting.

Previously, retailers could not assess a surcharge for credit card transactions even though it cost them more to process such purchases. For retailers, this meant profit margin varied depending upon whether or not their customers paid with cash or credit. As of Jan. 27, 2013, retailers have been allowed to tack on surcharges to cover the cost of swipe fees.

While merchants now have the right to pass on the extra costs of processing credit card payments to customers in the form of a surcharge, the law requires notice be clearly posted. Many retailers have been loathe to add a surcharge for fear of alienating customers.

Would customers really mind though? 

Some gas stations in Georgia and other states have previously offered discounts for customers who pay cash instead of credit. According to the AJC article, gas station owners see it as a way to not only avoid paying so much in transaction fees, but also as a way to get customers inside the store where they might make purchases other than just gas. For customers, the cash versus credit pricing offers a way to save money.

Do you think cash versus credit pricing is a good strategy for merchants? 

Would a cash discount make you more likely to visit a retailer or do you prefer to patronize places that do not differentiate between credit and cash purchases? 

If you are a credit card user, are you willing to give up the purchase protections and convenience a credit card offers in order to obtain a discount? 

At what point would the cost outweigh the benefits? Let us know in the comments.

- By Kristi Reed