Please Allow Congress to Give me a Discount for Paying Cash Instead of Credit

As much as I like to accumulate reward points, I usually pay cash when I go to the store. Now, I want the store to be able to pass along some of the discount that they are getting from not needed to pay the credit card companies for the pleasure of accepting their payment.

Retailers ordinarily pay credit card companies between 1.50 and 2.00% of the cost of any sale.  This cost represents a hidden inflator and is passed along to consumers.  At the prompting of the credit card lobby, however, a retail establishment is prevented from giving cash customers a discount at the register.

According to this article in the Wall Street Journal, Congress is considering a rule whereby retail establishments would be permitted to offer a discount to cash customers.

We still need to reconcile the reality that our economy's growth for the last several years has been based on consumer credit.  It has been a mirage.  The average household is twice as indebted as it was 10 years ago.  It makes sense for Congress to enact a rule that would dissuade the use of credit cards and remove from the rest of us the obligation to bankroll the costs of credit card companies and those who are less able to manage their financial resources.

However, I of course also see some disadvantages to a rule that would further encourage the use of cash.  For one, we all know that cash receipts are harder to track and companies can easily fudge their taxes where cash is involved.  This problem causes a dramatic loss of tax revenues from small and medium sized enterprises, and is only going to increase if this rule is passed.

Jason Rodgers
Jason Rodgers: Jason Rodgers was an experienced research analyst for a major bank prior to retiring to run his own investment consultancy in beautiful Lihue, Hawaii. Jason contributed articles to BestCashCow from 2008 to 2014.

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