Cash vs Card Charges: Ask for a Discount!

Did you ever know that when we pay by cash at a lot of stores these days, we can negotiate with the merchant to get a further discount?

Many customers do not realise that many of the merchants absorb "inter-change fees" that is charged by the card Issuer Bank for the transactions that is made. The rate charged can be as low as 1.3%, to an exorbitant 2.5% of the amount charged. Rates charged depends on the type of card used, or whether the card is the Issuer Bank's range of cards as well.

According to my understanding, the charges from the bank for using the terminals are:
- monthly charge for terminal used.
- phone line rental charge for terminal.
- Inter-change Fees (per transaction!)
- Discount rate (processing fee per transaction!)
- Address Verification Charge (for mail/telephone order)
- Annual Fee to MasterCard & Visa.

Hence, in reality, we are saving the merchant a lot of transaction fees & charges when we do not use a card. Take that knowledge and ask the merchant for a discount. Most times, the merchant will rather give you an discount when the customer offers to pay in cash than to have to pay the exorbitant fee when the card is used.

We might not get any reward points that way, but the freebies and other services that are probably thrown in will cost more than the reward points any day.

Related Links:
The Independent: What, No Cash Discount?
Blag A Deal: Getting a Discount for Cash.
Blog: Ideal rates & fees: