Closing up shop on credit cards

Stack of credit cards fanned out

A recent trip to the dog groomer left me scratching my head: The very shop I had frequented for years suddenly -- and without explanation -- stopped accepting credit cards.

Why would a merchant decide he’s no longer going to accept plastic as a form of payment?

Generally speaking, most merchants opt out of accepting credit cards to avoid paying processing fees and equipment costs.

On average, credit card sales cost most merchants about 2.5% of the sale. In some cases merchants pay as much as 4% to 5% per transaction.

If you’ve had your credit card snubbed, you’re not alone.

In 2010, President Obama took his Russian counterpart out for a hamburger. When they get to the counter, President Medvedev makes reference to a sign that said "cash only."

Obama started to explain the sign, and before the audio drops out, Obama starts his explanation by saying, "You know what happens. These credit card companies, they charge ..."

The noise of the crowded room takes over, but one can assume that Medvedev got an earful about merchant transaction fees, called interchange fees.

Even though a merchant’s snub of your credit card is annoying, it’s perfectly legal.

Unlike cash, which is considered legal tender, accepting credit cards is completely voluntary.

Business owners can stop accepting credit cards anytime and for any reason as long as they don’t discriminate against a customer or by card type within the Visa or MasterCard branded cards. American Express is a separate brand and merchant account for the merchant, so that is why some merchants do not accept these cards.

Sadly, it seems there’s little you can do to force a merchant’s hand and convince them to accept your credit card as form of payment.

A lesson I learned the hard way.

So if you’re like me and rarely carry cash on you, make sure to phone ahead to ask a merchant (including restaurants, dry cleaners, groomers, pubs and bars, and other small, local businesses) if they accept credit cards. That way you can plan ahead and have an alternate form of payment!

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