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Cash is an acceptable form of compensation to pay all debts, public or private, "legal tender". Credit is only an equivalent. Merchants charge higher prices for credit in order to defray some of the costs associated with accepting credit cards. A merchant (grocery store, shoe store, etc.) decides independently if they will accept credit cards as a form of payment for goods and services rendered. Once a merchant makes this decision, he/she must then pay a series of other businesses (equipment lease to swipe the credit cards, payment processor to coordinate the actual account debits and credits, etc.) a small amount for every transaction paid by credit card. Many merchants do not charge more to accept credit, as they consider it just another cost of business. Many merchants also do not charge more for credit card purchases because it is prohibited in their Merchant Agreement , and they could lose the entire ability to accept credit cards if they are caught doing it. Visa, however, does allow its merchants to offer a "cash discount" off the marked price, but not a credit premium, so the customer is never charged more than the marked price.

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โˆ™ 2007-04-13 22:58:39
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Q: Why do some companies charge different prices for cash and credit purchases?
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Related questions

Is it illegal to charge customers for credit card purchases?

Businesses are free to add a surcharge for purchases made by credit or debit cards.

How do firms benefit from credit purchases?

They can charge extra money for the credit and encourage consumers to spend more.

Are credit card charge-offs purchased by different companies?

The answer is yes. Banks sell their chargeoffs at different points in the collection process. The same buyer may make multiple purchases from the same bank, however the bank may be selling different pools of loans to different buyers at the same time.

How do you purchase and use credit cards?

You can buy credit cards by applying for them on the websites of the various credit card companies. You can also get 'prepaid' credit cards from supermarkets. To use a credit card, you swipe it(for purchases in brick and mortar stores) or type in its specified number(for online purchases) to make a charge for whatever you are trying to purchase and then you must pay the card issuer for the charges later on.

What are the different credit rating agencies?

The companies are Tran Union,Experian and Equifax.You can get your credit score for all three companies on the web.Some companies do charge a fee for their services.You can also send a request in the mail for r you credit scores for free once a year.

where can i find an instant credit report online?

There are several different companies that offer instant credit reports online. Most of the credit reporting agencies are not free and will charge you. Try

Where can I get a fuel credit card to earn rewards on the gas I purchase?

Most of the Major Oil Companies offer Fuel Cards that gibe you rewards points for your purchases. Some of the Major Companies are Phillips 66 and Quick Trip. Most Major Credit Card Companies also offer Rewards for using their Credit Card for Gas Purchases.

What is entry of credit and cash purchases?

Debit Purchases Credit Cash

How can you check on your credit card purchases?

most companies like visa for example has a website were you can check everything there

Is it lawful for credit card companies to charge unfair high credit card rates?

There are legal limits to how much interest can be charged. Usury rates are different in each state, most credit card companies are smart enough not to break the law.

Is it legal to invoice in Canadian funds but charge that amount in US funds on your credit card?

if your credit card is Canadian and you go to the USA your purchases will be charged in US funds, if your credit card is American and you come to Canada you purchases will be in Canadian funds.

Where do you find credit purchases in financial statements?

Credit purchases are shown in income statement as a part of total purchases.

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