Taco Casa 3.75% surcharge for Credit Card.

3,898 Views | 25 Replies | Last: 5 mo ago by taxpreparer
EBrazosAg
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Taco Casa on 40 tonight.... note at window about a 3.75% surcharge applied to all purchases, with a 3.75% discount applied to cash (can't remember if debit as well) purchases. No problem with cash discount. Don't insult me with the increase for CC. Just raise prices and then discount. Probably won't make me eat there less. But kinda insulting to put it at the window after drive thru order. Nothing about it at the order board. Probably not the best move when very few other competitors are doing anything similar. Just my observation. Oh, and if I wanted a fee applied to my purchase I'd be buying a airplane ticket, not a burrito. I'm not stupid ... that CC fee charged to the business has been there all along. This is an effort to pass thru increased expenses - very understandable- to customer but push the blame off on something else - in this case the credit card company - that has nothing to do with your increasing expenses.
rc_cat
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EBrazosAg said:

Taco Casa on 40 tonight.... note at window about a 3.75% surcharge applied to all purchases, with a 3.75% discount applied to cash (can't remember if debit as well) purchases. No problem with cash discount. Don't insult me with the increase for CC. Just raise prices and then discount. Probably won't make me eat there less. But kinda insulting to put it at the window after drive thru order. Nothing about it at the order board. Probably not the best move when very few other competitors are doing anything similar. Just my observation. Oh, and if I wanted a fee applied to my purchase I'd be buying a airplane ticket, not a burrito. I'm not stupid ... that CC fee charged to the business has been there all along. This is an effort to pass thru increased expenses - very understandable- to customer but push the blame off on something else - in this case the credit card company - that has nothing to do with your increasing expenses.
Yeah - I paid that fee once and won't go back. The part I'm not clear on - as a purely academic question, since I won't be a customer - If the menu board says a taco is $2.00 and I pay with a debit/credit card, they charge me ~$2.08. If I pay cash, do they charge me $2.00 or $1.92? In other words, is the cash "discount" truly a discount or just not a credit surcharge?
BCStalk
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Probably just trying to recover some cost for the 5lbs of cheese they put on every taco.
Bullpen Chias
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Small minded thinking
TXAG4EVR
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I resent the fact you aren't told until it is time to pay. I did it once. Won't be back. Plenty of other options.
Eliminatus
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Wasn't there a thread a while back discussing the legalities of such a thing? I don't remember what the consensus was.
rc_cat
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Eliminatus said:

Wasn't there a thread a while back discussing the legalities of such a thing? I don't remember what the consensus was.
There apparently was a law against it, but it looks like it was overturned -

story
LOYAL AG
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This is going to be long. As a career accountant that has done and undone a lot of merchant processing deals I know more here than I care to admit.

The way I read that article nothing has really changed though. The law changed a few years ago to allow for a cash or a credit price with the rule being that the "menu" price had to reflect a difference. The article says this:


Quote:

A merchant is now allowed to show you at least two prices: what it costs with a credit card, and what it costs with a cash or debit card payment.
Think about how the gas station advertises a different price for cash v credit. So for Taco Casa to comply with the law they would have to tell you that a taco is $2.08 credit and $2 cash like the gas stations do for regular unleaded. A fee tacked on top of the menu price isn't a separate menu price for using a card. In fact the article says this:

Quote:

A merchant who lures you in with a low cash price through advertising and then upsells you with a surcharge might have a problem.
That says that luring you in with "Tacos for $2" then charging you $2 plus 3.75% for a card isn't legal.

Of course it also says this:

Quote:

The surcharge must reflect what the actual swipe fee is. The maximum allowed is 4 percent. If a merchant charges more, file a complaint with the Texas AG's office.

I'm close to 100% certain that their weighted average processing costs are not 3.75% because in all my years of hiring and firing merchant processing companies I've never seen a company incur that kind of fee on average. Sure you can see it for any given transaction but not overall. I have terminated processing agreements for getting over 2.8% in a setting where I should have been at 2.6%. Doesn't sound like a lot but on $10M in volume it adds up. Most likely their costs are closer to 3% and could be less if they'd work a bit at it. Of course this kind of set up gives them no incentive to work at it. Right now I'd guess that Taco Casa is making .5% on ever CC transaction and that's illegal according to this article. It cannot be a profit center.

Here's what this is going to lead to. Either all merchants will go this route which will lead to fee creep and increased profit for Visa or it will become a means of differentiating between merchants and who does or does not want my business. In other words if all taco places do it I don't have much choice. I like Taco Casa but not so much that I'm willing to ignore that they aren't doing things the right way. I've already told my closest cleaners that I won't bring laundry there because they have a minimum credit transaction which is also not allowed. Nobody is forcing you to take cards but if you're going to take them do it the right way. Accepting cards comes with a contract, abide by its terms or don't take them. It's not really that complicated.

According to that article apparently 42 states allow these charges so Texas is a bit late to the party which tells me this isn't really going to go away. I get that they are expensive and they have to be for me to get 2% cash back from Citi on everything I purchase. I do like that merchants have the freedom to openly pass those fees along if they so choose as long as they choose to do it the right way. The idea that they couldn't do so before because of the First Amendment (that's the argument the winning side presented according to the article) is just absurd. I'm disappointed a judge fell for something so stupid. Nothing ever kept you from saying that cards are expensive and we'd appreciate it if you used cash or debit. Nothing ever stopped you from saying that cards are expensive and we don't want to take them. This is just business owners wanting it both ways and the consumer being told to suck it up.

Bottom line here is that according to that article in order for Taco Casa to do this the right way the menu has to show two difference prices for cash and credit. A flat percent added to the ticket still isn't legal. Do with that information what you will.

BCStalk
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So why does a gas station see a debit transaction as credit?

Example: I buy a Redbull, bag of chips and $50 in gas at the counter. I pay with a debit card for everything, but the pump charges me credit price.
LOYAL AG
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AG
BCStalk said:

So why does a gas station see a debit transaction as credit?

Example: I buy a Redbull, bag of chips and $50 in gas at the counter. I pay with a debit card for everything, but the pump charges me credit price.
Noticed that in the article as well. Looks like they should not do that. Perhaps the most important point in the article is that enforcement of the law is poor. At the end of the day they're going to do whatever they can get away with and if consumers don't make a big deal about it they're going to push the limits. My guess is nobody knows that debit isn't supposed to be charged a surcharge. I'm one for no more government than is absolutely necessary but the law is what it is so if someone complained about gas stations and the law stepped up I wouldn't complain. Me? I just skipped the Chevron that charges a higher credit price and go to Stripes which doesn't.
95_Aggie
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I am surprised they are still open. Their food cost has to be through the roof with the huge servings of crappy food they give you.

And don't order nachos there ... the chips are ALWAYS stale.
KidDoc
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Thanks for sharing good info!
No material on this site is intended to be a substitute for professional medical advice, diagnosis or treatment. See full Medical Disclaimer.
ShinerBlonde
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They have a small sticker on the drive thru order screen that states the fee and it's been there a long time. And they typically ask if paying cash or credit when you order before giving the total. 3.75% of my $8.00 order is 3 cents. I'm not too worried about that for the convenience of not carrying cash. Also, the chips and chips were regularly stale on the nachos for awhile but I think they've fixed it because I haven't gotten stale chips in awhile.
Superfreak
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ShinerBlonde said:

3.75% of my $8.00 order is 3 cents.


Username checks out
ShinerBlonde
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Superfreak said:

ShinerBlonde said:

3.75% of my $8.00 order is 3 cents.


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You are correct. That should say $.30. Not .03. Still not breaking the bank.
ShinerBlonde
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I'm a dumb blonde for putting 3 and not 30.

You should never made a mistake or a typo on the board. The board never misses a chance to remind you.
MarineBQ04
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Taco Casa is for sale
BQ_90
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MarineBQ04 said:

Taco Casa is for sale
so is there a surcharge if you buy it
snaglepuss
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I haven't bought a pizza in a while but when I did I was surprised Pizza Hut charges .99 for red peppers and .99 for parmesan cheese!
TLIAC
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I'll have to look again but I thought it was worded that there was a discount for cash, not a surcharge for credit - meaning you paid menu prices for credit card and less if you paid cash. Either way 3.75 percent isn't that much for me individually but I can see how it would add up for a business. I prefer Taco Casa over Taco Bell so when I break down and need a quick taco fix that's where I go.
EBrazosAg
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TLIAC said:

I'll have to look again but I thought it was worded that there was a discount for cash, not a surcharge for credit - meaning you paid menu prices for credit card and less if you paid cash. Either way 3.75 percent isn't that much for me individually but I can see how it would add up for a business. I prefer Taco Casa over Taco Bell so when I break down and need a quick taco fix that's where I go.


I believe the sign made it clear ... there was an additional 3.75% fee charged for all food over the menu price (WTH) and you get a credit of 3.75% if you pay cash. That's a little more than a discount for cash.
Charli
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Honestly, I have no problem paying a surcharge for using a card or getting a cash discount.

To be honest, more of us cash wielding consumers should ask for a cash discount for every transaction.




Cash is King
Orlando Ayala Cant Read
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I know I'm in the minority here, but I just don't get the love and fascination for TC.
taxpreparer
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BQ_90 said:

MarineBQ04 said:

Taco Casa is for sale
so is there a surcharge if you buy it
Depends, are you using a credit card?
***It's your money, not theIRS! (At least for a little while longer.)
Well, okay then
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Pepe's
taxpreparer
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Well, okay then said:

Pepe's
This, times ten.
***It's your money, not theIRS! (At least for a little while longer.)
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