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the U.S. Supreme Court served a death knell to the rules "[C]redit card companies' rules make cash discounts
by declining to consider Visa and MasterCard appeals. extremely difficult to offer," wrote the MPC. "Visa in
particular has attempted to characterize some cash
What about surcharging? discounts as a prohibited surcharge on credit card use,

It's not really clear that the government can build a legal and has threatened some merchants with fines of $5,000 a
case against interchange, at least one involving antitrust day for offering cash discounts."
laws. But what about surcharging?
Perhaps there is an element of truth in this statement, but it
It's not a new issue. Surcharging, or offering discounts seems a bit disingenuous to suggest Visa and MasterCard
to customers who pay by cash rather than card, has been are the sole reasons why merchants don't surcharge card-
a contentious issue for more than 20 years. Back in the paying customers. One of the first lessons I learned in
1980s, when gasoline shot up to nearly $1.00 a gallon, gas this business is that merchants want to sell stuff and the
stations began offering discounts to cash customers, to easier they can make it for consumers to buy stuff the
the consternation of folks at the card associations and in better. Over the years this has meant adding credit cards,
Washington. debit cards, prepaid cards and other instruments to their
payments mix.
The government's concerns at that time revolved around
notions of equal treatment – those consumers who don't I suspect merchants fear that by making one payment
have the cash on hand at the time they need to fill their gas method more expensive than another they may chase
tanks should not be punished for paying by credit card. off customers. That may happen, but it's a cost of doing
business, just like interchange.
The MPC brought up the issue of surcharges in its letter to
the Judiciary Committee task force. Although MasterCard Patti Murphy, senior editor at The Green Sheet, has been following
and Visa have insisted publicly merchants are allowed to and writing about payments for 40 years and has been working with
offer discounts to customers who pay by cash rather than The Green Sheet for 25 years. Patti is also co-host of the Merchant
by card, the MPC argued that behind the scenes merchants Sales Podcast. Follow her on LinkedIn at www.linkedin.com/in/patti-
who want to do so are undermined. murphy-1082911.

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