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Old 18th August 2008, 16:00   #46
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Originally Posted by rkg View Post
what puzzles me on what basis banks charge commission on debit card use?
No, they are not suppose to. There was an incident in chennai where the HDFC charged such charges to a customer and he got it back with penalty from bank after he moved to court.
Court infact mentioned that the customer has reduced Banks headache of having a "person" to serve him by using the card. Moreover they also charge 100rs for the debit card facility. So, WHY?

I just googled for the terms and conditions for the CC. I was shocked to see this

9. Charges shall mean transactions made or charged to the Card Account under this Agreement whether or not the Cardmember signs a record of charge forms. This would include but not be limited to purchase of goods, services or cash advances or drafts made from the account by use of the Card or Card Number, joining fee, annual fees, finance charges, over limit fee, late payment fee, transaction charges, service charges, service tax and any other fee/charges/amounts which the Cardmember has agreed to pay or is liable to pay to the Bank under this Agreement.

More here Most_Important_T&C

Last edited by mjothi : 18th August 2008 at 16:05. Reason: added ToC for CC links
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Old 18th August 2008, 19:04   #47
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Originally Posted by autopsyche View Post
I shouldnt care if the customer has to walk 2 miles to find the nearest atm right?

Using our credit card payment system at our place is a privelage and not a right. Every customer understands this and is willing to pay the extra 1.5% for his/her own convinence.
Arush, i think you should look at this from a different angle

With the competetive scenario that exists today, merchants are looking at taking the customer experience to the next level and that includes warm acceptance of a card of the customer's choice. If a merchant surcharges his customer at 2%, the customer today has the option of shopping at enough and more merchants who will offer similar products/services at nil surcharge. A lot of merchants today realize the additional business they could get from impulse spending cardmembers. Despite being extremely happy with the service offered by a merchant, persuading a customer to pay by cash or surcharging on his card WILL take away that customer experience to an extent.

Well thats at least the case with MOST merchants, but we all know that people will flock to autopsyche no matter what just for your designs so you might have a point
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Old 18th August 2008, 22:34   #48
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When a merchant enters into an agreement with a bank (for credit card acceptance), he agrees to pay the bank a %age of the transaction amount (might vary from bank to bank) as charges. They do this not out of love for the bank, but because of the possibility of getting extra business from customers, especially the ones that live on credit (ie. roll over their card bills, paying exhorbitant interest rates), but cannot avoid impulse buying.

When an individual gets a credit card, as per the agreement, he might or might not have to pay joining/annual fees (today you should be a fool to pay any kind of fees - almost all cards come lifetime free). Also, if he rolls over dues to the bank, he needs to pay heavy interest close to 30% p.a. However, he is not required to compensate the merchant the service charge that the merchant is to pay as per his agreement with the bank. Apart from paying his charges, why should be pay the merchant's also ?

If a merchant cannot afford to have the bank take a cut of the transaction, he is free not to offer credit card purchase. Just have a board saying, "Only cash. Credit cards not accepted". But those that charge the service charge from customer are trying to get the best of both worlds (use credit cards as a tool to gain customers, and at the same time not have to pay for it), which is wrong.

I use CCards wherever possible and if a shop says, they will charge extra for CC, I just say thanks and walk out. There is always another shop who play by the rules.

Quote:
Originally Posted by autopsyche
Like i said before, if the customer is willing to pay for his convinence, why should i not keep a CC Machine?
For his convenience, he is already paying the bank. And similarly for the convenience of getting more customers, the merchant should be paying the bank his share, not the customer.

Quote:
Originally Posted by spadival
The merchant would be breaking the T&C of the agreement if they charge a 1.5% surcharge.
Very true.

Last edited by supremeBaleno : 18th August 2008 at 22:35.
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Old 18th August 2008, 22:50   #49
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Originally Posted by autopsyche View Post
I acknowledge your points, but all im saying is that case scenario is on MRP. I agree as far as MRP is concerned the surcharge should not be added and it has to be borne by the merchant.

However in smaller establishments like ours, the customer more often than not everytime asks for a discount and gets a discount on the listed prices, in that case we have no option but to add the credit card surcharge if thats the mode of payment. I shall not charge a rupee more if the customer is paying us list price, but in discounted cases im not willing to bear the brunt of another 1.5% no matter small change it may be.
I agree with this. Even Big wholesalers sight the low margin on their goods as reason for charging the surcharge on the customer. Their point is similar to Arush's. The goods are already sold on a amount which is less than the MRP so why should they cough up the surcharge as well.

It's all a matter of choice. Most of us still tip the bearer at restaurants even after the bill claims 10-12 % as Service Charge from us. This is apart from the VAT. The SC goes to the hotel not to the Govt
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Old 18th August 2008, 22:58   #50
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Quote:
Originally Posted by kiku007
Most of us still tip the bearer at restaurants even after the bill claims 10-12 % as Service Charge from us. This is apart from the VAT. The SC goes to the hotel not to the Govt
S.C. in this case, is tips taken by the establishment compulsorily (customer having no choice) and AFAIK it does not go to the management, but to a pool from which it is disbursed among the wait staff. So, if you already paid up S.C., no need to tip on top of that. But if you insist, well, its your money.
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Old 18th August 2008, 23:16   #51
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i have a few friends who run some establishments. one of them is a 2-wheeler showroom and i have had detailed discussions with him on this s.c issue. the fact is that vehicle margins are 2-2.5% only and if the dealer is going to pass that off as a s.c then what will he be left with? when the merchant received the payment for the swipe, it comes s.c deducted plus serv.tax deduction on the s.c amount.

but whereas at the service center, no surcharge is added because there is both a labour component and spares component on most bills. and here the s.c can be accommodated.

what he also says is that in the event there is a clear notification by the courts that merchants cannot pass the s.c to the customer then he would gladly rid himself of the machine itself at the sales counter.
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Old 18th August 2008, 23:49   #52
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Quote:
Originally Posted by supremeBaleno View Post
S.C. in this case, is tips taken by the establishment compulsorily (customer having no choice) and AFAIK it does not go to the management, but to a pool from which it is disbursed among the wait staff. So, if you already paid up S.C., no need to tip on top of that. But if you insist, well, its your money.
True. But when I checked with some waiters if the SC went to them, the fact is that apart from the Star Hotels, most of them were not even aware of such a practice. So if am really pleased with the service I do tip the chap. Sorry for going off topic.
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Old 19th August 2008, 00:26   #53
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Quote:
Originally Posted by autopsyche View Post

Using our credit card payment system at our place is a privelage and not a right. Every customer understands this and is willing to pay the extra 1.5% for his/her own convinence.


Hope it helps clears some doubts.
Hey. I just have one doubt. While buying/renting those machines from the banks you have made an application to the banks. Did you really read the terms and conditions in that before signing it?

You may have logical reasons for what you are doing. BUT IT IS ILLEGAL.

Last edited by HotChillyPepper : 19th August 2008 at 00:29.
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Old 19th August 2008, 00:51   #54
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slipstream, supremebaleno, hotchillypepper, you guys have missed my next post. I'll repeat it just to mke sure you understand what i was trying to convey

"I acknowledge your points, but all im saying is that case scenario is on MRP. I agree as far as MRP is concerned the surcharge should not be added and it has to be borne by the merchant.

However in smaller establishments like ours, the customer more often than not everytime asks for a discount and gets a discount on the listed prices, in that case we have no option but to add the credit card surcharge if thats the mode of payment. I shall not charge a rupee more if the customer is paying us list price, but in discounted cases im not willing to bear the brunt of another 1.5% no matter small change it may be."

And yes the 1.5% addition can be included in the bill to to make it legal to both parties.
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Old 19th August 2008, 01:03   #55
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read it as " we sell for 101.5X, but extra discount if you pay by cash".

rather than " we sell for 100X, surcharge if you pay by card".

unfortunately second one makes a better sales pitch.

I have seen it even in gas stations in SC here where they give discounts on cash purchases.
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Old 19th August 2008, 01:09   #56
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Here are examples of a private and a government institution openly mentioning addition of surcharges on CC payments. They must be having a point right?

Make My Trip: MakeMyTrip.com-Golden Triangle Tour

IIT, Bombay: ::: Instruction Page - Online Payment System :::
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Old 19th August 2008, 01:12   #57
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Quote:
Originally Posted by autopsyche View Post
slipstream, supremebaleno, hotchillypepper, you guys have missed my next post. I'll repeat it just to mke sure you understand what i was trying to convey

"I acknowledge your points, but all im saying is that case scenario is on MRP. I agree as far as MRP is concerned the surcharge should not be added and it has to be borne by the merchant.

However in smaller establishments like ours, the customer more often than not everytime asks for a discount and gets a discount on the listed prices, in that case we have no option but to add the credit card surcharge if thats the mode of payment. I shall not charge a rupee more if the customer is paying us list price, but in discounted cases im not willing to bear the brunt of another 1.5% no matter small change it may be."

And yes the 1.5% addition can be included in the bill to to make it legal to both parties.
Agree with you on this... many a times the profit margins are just too low for the extra charges to be borne by the merchant. That is exactly what the RBI directive states as well. If one is buying anything from a merchant at MRP, he/she is bound by law to only charge mrp and not one penny more. However when selling below mrp, he's free to sell at the price he likes!
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Old 19th August 2008, 01:13   #58
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Quote:
Originally Posted by autopsyche View Post
slipstream, supremal, hotchillypepper, you guys have missed my next post. I'll repeat it just to mke sure you understand what i was trying to convey

"I acknowledge your points, but all im saying is that case scenario is on MRP. I agree as far as MRP is concerned the surcharge should not be added and it has to be borne by the merchant.

However in smaller establishments like ours, the customer more often than not everytime asks for a discount and gets a discount on the listed prices, in that case we have no option but to add the credit card surcharge if thats the mode of payment. I shall not charge a rupee more if the customer is paying us list price, but in discounted cases im not willing to bear the brunt of another 1.5% no matter small change it may be."

And yes the 1.5% addition can be included in the bill to to make it legal to both parties.
autopsyche ,

What you are telling is logically right. It will be a big burden if you pay 1.5% from your pocket after giving such a big discount on MRP.

But for me its not an ethical way of doing business. You are challenging a rule laid down by RBI which can punish you if proved guilty. Do you really think this logical explanation will withstand in any court ?
My gut feeling is that, this is not a solution for your problem. Sorry, if I m wrong.
Cheers
-HCP
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Old 19th August 2008, 07:38   #59
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I read this practice of charging extra for CC payment as a different interpretation of rules, like

"You get 10% discount if you pay by cash, else you get only 8.5% discount!"
I guess there is nothing wrong for the merchant to have different discount percentages, as long as he gives me a bill for the amount that he is taking from my card.
Things are wrong when you give me a bill for Rs100 and my card gets charged for Rs101.5

So as long as merchants make things clear there should be no issues.

Regards,
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Old 19th August 2008, 13:21   #60
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Quote:
Originally Posted by ajmat View Post
What is a really a killer are forex transactions. HSBC juice me by 10% in currency exchange rates when shopping abroad. Does anyone know any alternates?
Quote:
Originally Posted by Sam Kapasi View Post
That is ridiculous. I am 100% sure I do not pay those rates when I use both my HDFC and Citibank cards.
Call your bank Ajit and fight it out.
This seems to be a new law. With current $ rate it does come around to 10%.
https://www.hsbc.co.in/1/2/miscellan...ex-service-tax
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