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-   -   Can the dealership charge me 2% extra for service, if I pay via credit card? (https://www.team-bhp.com/forum/indian-car-dealerships/268609-can-dealership-charge-me-2-extra-service-if-i-pay-via-credit-card.html)

I have given my nighteagle (petrol auto) for the 1st year free service. I requested the service center to equip the jeep with the OEM dashcam (front & back) + sunfilm + door edge guard + touchscreen guard.

When I told the service center I will pay through credit card, he responded saying he will charge me 2% extra on the bill value and is pushing me to pay through cash. I am surprised VTK Jeep is doing this.

On a side note, when I give my polo gt for service I never get charged additionals and I pay by credit card only.

Has anyone else faced this with jeep service centre? Is this the norm with them. Any guidance here will help me, when I pick up my jeep in couple of days time.

This is absolutely not normal. Paying with your credit card for service is usual practice just like you do in any other shop. I have been doing it for years now and also in Jeep Service centres. They are trying to trick you here.

They have never charged anything additional for paying using credit card on multiple occasions when serviced..
It could be for the accessories you are getting from them, but that too doesn't warrant it. Escalate it to the service manager

Moving your query out to a new thread.

He is basically trying to get the MDR from you, which he would be paying. Used to see this a lot with small shop owners back in the day, but in today's digital India, I haven't come across the practice in a while.

You should not be paying this extra charge.

Bavaria Motors - BMW Motorrad, Pune does. Weirdly, friends who take their BMWs (4W) to them for service have mentioned they don't get charged the extra 2% for credit card payments.

That said, Bavaria Motors is far, far away from being a decent ASC. But being the only one in the city means they can get away with it.

Fun fact: Do you know, they also charge some 300 bucks just to mount the bike on a paddock during service. Thank god they don't charge car owners for their cars to go up the lift!

Thankfully, I haven't been charged extra for credit card payments at any of the other ASCs I have taken my cars to, be it Hyundai, Honda, Ford or Tata.

Moharir Ford in Nashik charges extra for credit card payments at the SVC. Dhone Ford in Pune does not.

Bajaj service centres usually also charge extra for card payments. Have experience with Sai Service Kothrud (Pune) and Wasan Bajaj in Nashik.

Do they have UPI payment option? That is the fastest and simplest payment method in my opinion. Its certainly the most efficient one.

On the issue of credit card payment, I have never been charged extra for service bill at either MA$$ or Renault A$$. When making an outright purchase, I was told by a Hyundai showroom they will charge even for a debit card many years back.

I have seen three types of merchants doing this (not across the board; just some of them).

1. Those whose ticket sizes are large (running into lakhs - say, big jewellers).
2. Those whose transaction count is small (say, a village store with maybe, a dozen CC transactions a month).
3. Those who are individuals accepting payments (eg: doctors running independent consulting offices).

In all these cases the business advantage of accepting credit cards I guess isn't sufficient to offset the extra transaction cost or regulatory headache.

Many years ago, across the world it was not unusual to be charged 2-4% charge if you paid by credit card. Especially in countries new to credit cards. Problem is the merchant is being charged by the credit card company for the transaction. American Express was the worst. In Europe ten years ago many shops would simple not accept Amex.

In those days it was not uncommon for shops to have a little sign on or near their cash register saying they would charge extra for credit cards.

These days it is rare, but if you for instance are staying in a small B&B in France or Germany they are very likely to prefer being paid in cash or debit / bank card.

Jeroen

Q - are they pushing strictly only for cash payment or did they mention any other payment mode other than credit card?

If it's the latter, there's nothing illegal here, just poor customer service / inconvenience. Basically he's pushing the MDR charges (which otherwise he'll incur at his end) to you. A lot of small businesses / shops used to do this (and some still are doing); alternatively they would suggest one to make payment via other modes (that includes cash / debit cards / online transfer / UPI / etc). Not really the norm for larger business shops like auto dealerships. There wouldn't really be a loss for you; except for the inconvenience. And a missed chance to gain some credit card reward points I guess. If I were you, I'd push for another non-cash payment mode and move on.

However if it's the former, and if he still sticks / pushes only for cash payment, then that's wrong; and you should complain to the MD/higher-ups over there. Should get resolution fast.

For a car dealer- parts sale only have a 18-22% gross profit margin. Parts generally account for 70% of the invoice value.

When the dealer is bearing the MDR of 2% to 2.5%- he is basically giving away 10% of his gross margin directly to the credit card companies.

In today's age, dealerships have to provide credit cards as an option but these expenses do add up over time. This kind of behaviour is generally seen in low margin businesses.

While the prevalence of such practice has reduced greatly over the years, there are still places doing enough sales ( old mentality carried over? ) who still ask for extra 2% even in big cities like Pune.

Some will tell you upfront, while some indulge in shady practices saying they accept card payment and after the job is done and its payment time, they will say 'Saar, issue with machine'. This is the worst case scenario I have observed when you have to go hunt ATM machine to get cash.

So now I ask upfront whether card payment is accepted or whether the POS machine is working before proceeding.

4) When the margins are low.

If the shop owner has a margin of 5% to 10%, it might not be feasible for him to lose 2% on credit card payments.

It will be bad publicity for the dealership, but it is not illegal. He is just passing on to you whatever the card company will charge from him. This used to happen a lot during the mid 90's to till about 2005 or so, but is surprising now. I have seen boards proclaiming this outside shops. I have even seen boards which said "American Express cards NOT welcome"! Probably because the amount they discounted during settlement was the largest.

Payment gateway charges are very much applicable on online payments. It will be almost 2% considering the payment gateway charges and there is also GST applicable on the charges.

This is a fair ask for the customer to pay but the business may decide to waive off depending upon overall margins available. With some customers it is a touchy subject, so business will waive it off but end of the day there is no escaping the payment gateway charges.