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Credit Cards at Restaurants

  • j

My wife and I just had dinner at Lisca, on Amerstdam and 92nd. The dinner was good. When I received the check, it was in an American Express embossed leather folder. I handed over my Visa card, thinking that if they didn't take Visa, I would provide my Amex. They came back and said they don't take credit cards at all. I asked if it said something on the menu -- they said it didn't, but that there was a sign outside. There wasn't anything I could find. Apart from being sleezy delivering the check in the Amex folder, not telling anyone about the cash only policy until after the meal seems underhanded and left, pardon the pun, a bad taste. What is the best way of communicating that you don't take credit cards? The couple percent that the credit card companies charge can't be a make or break for restaurants with $25 entrees (both of our's were). The only reason I can think of is to defraud the IRS. Are there any good reasons (for places like Lisca) not to take credit cards?

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  1. There is a guy who owns two restaurants and a small take out place in Richmond. One of the restaurants takes reservations and credit cards, the other does not. They have a sign on the door stating they don't accept credit cards. I'm not sure of the reasoning behind it.

    2 Replies
    1. re: Janet

      I imagine that, if it is a small local restaurant, the percentage the credit card takes can dig into their profit margin. Restaurants make (if their dishes are 25 dollars and under) only about 4 percent profit. However, you should have been informed about the cash only policy. It's usually printed on the menu, or there should have been something included with the bill (in what was obviously a gratis bill folder from Amex).

      1. re: Janet

        My guess (being a regular patron of the refered establishment which takes reservations and credit cards) that the original restaurant doesn't do so because it's part of their schitck of being a pain and difficult in general (rude servers, no printed menus, etc.). Also their restaurant which takes both reservations and credit cards does a lot of business and large group type of dinners...I have no idea if that is a factor.

      2. I usually ASK if a resto takes plastic before ordering because I do not carry much cash. That being said, I believe that restos that do not take non-traditional forms of payment are either laundering money, or stuffing the mattress. I mean, even the national fast food chains will swipe my card.

        6 Replies
        1. re: GooGLeR

          But Taco Bell does charge 0.99 for using a card (at least where I live). I know of some owners that do think the fees from the card companies eat into their profits. It costs money to set up the card system too. Last time I knew the numbers, the national average for profit in a restaurant was about 3%. That being an average, there are a lot of places below that.


          1. re: ChefElias

            Credit card companies have had rules that prohibit fees and minimum purchases for using a card. I am not aware of any changes to these rules to facilitate credit card use by fast food restos. I would venture to suggest that the restaurant you went to is a franchisee who is trying to pull a fast one on the customers. You might consider disputing the charge with the credit card issuer.

            1. re: GooGLeR

              True... however, there are some ways around it. Most of the fast food restaurants that charge fees for using a card are charging them for debit transactions, where the PIN is used. Those transactions aren't dicated by the same rules as are the ones that use the MasterCard/Visa logo (which stipulates you can't pass on the fee to the consumer).

              Considering PIN-based transactions literally costs a couple of pennies, Taco Bell and the other fast food restaurants charging a fee are ripping everyone off.

              1. re: adamclyde

                The original post mentioned credit cards, NOT debit cards; that said, I have never used a debit card at any place other than an ATM, so I was not familiar with other fees that could be charged. The link below explains the fees you refer to and is another reason NOT to use a debit card for anything other than getting cash.

                Link: http://moneycentral.msn.com/content/B...

                1. re: GooGLeR

                  don't get confused... debit cards have dual networks - PIN-based (referred to in the biz as an online transaction) and signature-based (offline).

                  The former charges the merchants nearly nothing for every transaction. So merchants like it better. However, it doesn't make as much for the banks. The second charges merchants more, so they don't like it as much, but it makes more for the banks. Hence the lovely back and forth between retailers and banks...

                  If you use your debit card in the latter fashion (signature on receipt), you get all the perks of normal credit card transactions, since it runs over their network. Including the fact that the merchant won't (or shouldn't) charge the consumer a transaction fee, etc.

                  If your bank is charging you transaction fees for using your debit card in either fashion, drop them like a rock. I have two banks, neither of which charge any fees for any transaction - whether I use my PIN or not. Only time I get charged is at an ATM that isn't at my bank. But never, never for a purchase of any kind.

                  1. re: GooGLeR

                    The link that you provide here actually summarizes at the end that you SHOULD use debit instead of credit to keep down the overall costs of things. What people don't understand about basic economics is that when the fees fall on the merchants they inevitably fall back on the consumer anyway...in the form of higher prices. And the only ones winning here are the credit card companies!!

          2. I would think that today, when people at the Swap Meet take credit cards, the veterinarian takes credit cards, and Taco Bell takes credit cards, that anywhere that doesn't had better announce loud and clear, in big letters multiple places, that they don't.

            The last place I went that didn't I was just dumbfounded.

            1. You're certainly more suspicious than I am. I figure it's a smallish, hard-working place that doesn't want to let credit-card companies skim off their cut. That said, nevertheless, they should certainly make it known upfront.

              5 Replies
              1. re: Fida

                Then it's pretty tacky of this "smallish, hardworking place" to use credit card company-provided check folders. I mean, how poor do you have to be not to be able to buy some plastic folders of your own? It's like having Coca Cola logo glasses but not serving Coke.

                1. re: Sir Gawain

                  how suspicious of you! perhaps they used to take cards but had too many problems and had to/decided to stop accepting them.

                  1. re: jenn

                    Whatever. If they charge $25 an entrée, they should take plastic.

                    But, on an unrelated subject, are you the spokesperson for undertipped waiters in the city? I seem to remember your handle from that thread... sorry to digress...

                    1. re: jenn

                      ....if they had some "problem" with Amex, why are they still using their check folders? As previously noted by the OP and others, it seems tacky and misleading to do so.

                      Based on what has been said, logic would seem to dictate that Amex had a problem with the restaurant, not vice versa.

                      1. re: peg

                        I agree. Amex provides the folders in an attempt to influence your paying habits (that's marketing, folks, not some evil brainwashing), so it seems ridiculous to use the folder and then not accept Amex. It makes the restaurant look cheap, as if they bought the folders on eBay or at a garage sale in an attempt to look 'professional'.

                2. they should tell you when you make a reservation. i have eaten at a few restaurants that don't take credit cards, but they tell you when you make the reservation. if you just stopped in without a reservation, they should tell you before they seat you to avoid embarrassment. but i don't think that they are cheating the irs, it is just that credit card companies take a percentage and it is very hard to keep track of the settlement statement. they probably just don't want to be bothered.

                  1. Living in NYC, I would never assume that a place takes credit cards, as so many don't. If there is no logo on the door, then better have cash handy. We always look for a Visa or Mastercard logo as we go in.

                    As to why they use the check holders with the Amex logo, does seem weird, but probably not someting they even thought about.

                    3 Replies
                    1. re: krissywats

                      We always look for the credit card signs in the door. If we don't see them, then we ask if they take credit cards. I do think it's slightly ridiculous for a restaurant that charges $25 for an entree to not take credit cards.

                      1. re: LisaLou

                        It is ridiculous...Many people do not carry $100 on them at all times. And furthermore, how do you have the nerve to bring over the check in a AMEX folder and don't take credit cards? I mean...Come on! You shouldn't be in the business if you cannot afford to take credit cards.

                        But, if you don't take credit cards, post that info clearly on your front door. CASH ONLY...NO CHECKS...NO CREDIT CARDS.....Can't get any more customer friendly than that.

                      2. re: krissywats
                        Bob Martinez

                        "Living in NYC, I would never assume that a place takes credit cards, as so many don't."

                        I live in New York as well and have to disagree - the large majority of mid range and higher end places take cards. The places that don't take cards tend to be smaller ethnic places with thinner profit margins. The tab in places like that tends to be significantly lower and so cash isn't a problem.

                        About once a year I run into trouble where a higher end place blindsides me and doesn't take plastic. It's rare but it does happen.

                        Your advice on checking for credit card decals on the front door is spot on. If you use Citysearch to track down a restaurant's location the card info also appears on their site.

                      3. Profit margins in restaurants very thin, expecially in moderate non-chain restaurants. Not only does the credit card cost a percentage, the rental of the credit card reader can cost in excess of $500 per month.

                        This is not normally a problem for me as I seldom use a credit card in a restaurant unless it is for business travel, but the restaurant should have told you when you made the reservation. Of course, I understand that NYC has many more restaurants that don't take credit cards than is the case here in Washington DC

                        3 Replies
                        1. re: dinwiddie

                          The credit card reader doesn't cost much more than $500 to *buy*. (Years ago I had a mail order catalog and paid $750 for my system--complete.)

                          1. re: dinwiddie
                            Wayne Keyser

                            "The rental of the credit card reader can cost $500 per month"?????

                            Nonsense - there are predatory companies charging outrageous fees for business card-processing setups, but the more reasonable ones are really not hard to find. Anybody who pays $500 per month to rent a credit-card terminal is so business-dumb that he'll be out of business very quickly.

                            Unless, of course, that $500 includes the percentage charged by the credit card company - and if a place is paying $500 per month in the form of 5%-of-the-charge fees, it's doing so well that it can easily afford it.

                            1. re: Wayne Keyser

                              I agree... low-end credit card terminals are dirt cheap... think of the people at the farmers markets who are now using them. They don't have to be sophisticated... you can buy a system on amazon that costs under $200 total. I suppose if you want a sophisticated system that connects your terminal to your servers and your finances and your HR and your etc... you are looking at serious money. but that just isn't required to accept credit cards at a restaurant.

                              I once ate at a place on the Upper East Side in manhattan... they left the check on a little Amex plate. Thinking they accepted Amex, I offered that. They didn't. Cash only... I couldn't believe it. At least there the meal, for two, only cost about $20.

                              No excuse for a place charging upwards of $30 per entree to not accept credit cards, in my opinion.

                          2. Your assumption that the restaurant that doesn't take plastic must be defrauding the IRS to be a bit over the top in the negative catagory. There are lots of reasons why a restaurant might not accept credit cards: it costs them money and cuts their profits, the system complicates their accounting, they haven't had time to set-up etc.

                            Having googled your restaurant Lisca, it appears to be fairly new which is one very good reason that they might not be accepting credit cards yet. From the reviews I found, they seemed to be very accommodating to those who arrive and aren't aware of the "no credit card" policy. http://www.menupages.com/restaurantde...

                            In LA there are plenty of restaurants that don't take credit cards and they range from mom&pop places to fancier jobs. And I've had the same experience in Europe where many smaller places don't take credit cards.

                            I never rely on the sticker in the window to tell me if the place takes plastic or not. With the quickness of turn-over in restaurants [I go by a place each morning that has changed names at least 3 times this year], a sticker might relate to a predeceasor establishment.

                            IMHO, when one doesn't have sufficient cash to cover a meal, the burden is on me, the diner to ask in advance if credit cards are acceptable. I mean, after all you show up at a restaurant assuming that they actually have food and they feed you assuming that you actually can pay for the food.

                            But I sure wouldn't use the fact that one can use a credit card at a fast food restaurant as a reason that every restaurant should allow credit cards. Fast food restaurants aren't paying for either good food or good service, both of which are expenses that a real restaurant has to cover in order to make a profit off of serving you dinner.

                            1. I own a restaurant in Los Angeles. Credit card sales represent about 65% of our business. Any restaurant is ignorant in today's world not to take credit cards as payment. People will buy that extra dessert knowing that they don't have to think about the cash in their pocket. Yes it costs us at the end of the year averaged with our cash sales about 2%. So what!! CUSTOMER SERVICE is number one in our industry. Customers love paying with their credit cards. We take all cards for this reason. We want to encourage people to dine at our restaurant and not have them decide to eat elsewhere because they don't want to stop first at the ATM.

                              As far as eating into your profits. That is another joke. Yes it costs money, but we figure that percent into our food costs when we price our menu. No different than figuring the ingrediant costs of a menu item. The fee is just another ingrediant. The restaurant you dined at should have priced their items at $26 instead of $25 and accepted credit cards. Now you probably won't return to that place because of this which means a loss of future revenue as well. Not to mention the bad press for the place because they are not into CUSTOMER SERVICE.

                              Our Visa/MC transactions post to our bank account the next day. AMEX takes 3 days to post. We have less cash in our business to worry about making a bank deposit. Less cash for theives to try to steal. Less cash for employees to try to steal. Every day you know exactly what will be posted into your bank account. This makes end of the month accounting a breeze.

                              4 Replies
                              1. re: InTheBiz

                                I read somewhere that people will spend on the average 30% more when they use credit cards. I know I do!

                                1. re: coll

                                  Isn't that the theory behind giving everyone credit cards on cruises? You don't think about the drinks bill until you're ready to leave.

                                  1. re: yayadave

                                    >>Any restaurant is ignorant in today's world not to take credit cards as payment.

                                    I couldn't agree more.

                                    >>Yes it costs money, but we figure that percent into our food costs when we price our menu.

                                    Hallelujah! InTheBiz, you're my hero. You have validated what I have been saying for years.So nice to know I am right.

                                    >>So what!! CUSTOMER SERVICE is number one in our industry.

                                    I bet you're not in my geographical area. You're my hero.

                                    1. re: dolores

                                      I agree with you, InTheBiz. It all comes down to this: Do you want their money or not? Yes, it cuts into profit. But, a lot of things cut into profit. Keeping clean bathrooms cuts into your profit. Gotta buy supplies, pay for labor to clean before and after service, air fresheners to make it smell nice, paper towels, etc.. Is it worth it? Yes, of course. People will not come back if you have a filthy bathroom. People will not come back if they are ever embarrassed over not having cash or dealing with the hassle of going to the ATM. I have a few friends that never EVER have cash. I usually do. So, if it was sprung on us at the last minute, I'd get stuck footing the bill. Since I hate money talk in social settings, it would be uncomfortable to "remind" them to stop at the ATM before they go home to pay me back half. I don't mind paying for my friends, but it's not something I always want to do. So, after the first time... I'd just remember that we wont be going back to that restaurant the second time.

                              2. the argument for credit cards v cash has been debated on here many times. The real issue here is that the resto did not give reasonable prior warning that it is cash only. There should have been a big sign on the door and it certainly should have been written on the menu. Did they have an ATM on the premises?

                                1. I recently moved to a small city (about 40,000) in Kansas from Charleston and Greenville South Carolina (both metro areas over 300,000, Charleston very touristy). I learned quickly that quite a few places here (and not just restaurants!) don't take credit cards. Where I lived in SC, it was almost unheared of for restaurants to accept checks. Here, many restaurants will accept checks, but not credit cards.

                                  Even back in SC though, most of the very small, especially ethnic places did not take cards. Here in KS, its really hit or miss with anything that isn't a chain. I always try to have cash or checks on hand, and if i go to a new place, I always ask.

                                  1. Ancient thread alert! This is from three years ago, for crying out loud! And the restaurant obviously got enough complaints about the no cards policy that it started taking them. Go to the MenuPages link in Jenn's post above and it now shows that they take all major plastic.

                                    2 Replies
                                    1. re: BobB

                                      Yeah, if they have a cash only policy, I deduct at least 5% off the tip (so if I would normally tip 15% and they took credit cards, I would only tip no more than 10% if they mandate cash). I get 5% in credit card rewards, and its an inconvenience for their customers. Sure, the server eats the fluctuation in the short term, but they will make the long term decision of whether its worth it to keep working for their restaurants based on their after tip hourly rate of pay. So lower tips= more turnover cost for the restaurant.

                                      Fortunantely though, I have run into no restaurants that are cash only. I have seen some that don't take american express, but they at least take visa and mastercard and less so Discover. Not to mention, fumbling for the right amount in cash is a pain, as I prefer to just right in the total on the receipt.

                                      That's why, I'd have to say its a good investment to increase customer and employee satisfaction by accepting at least Visa and Mastercard (and possibly Discover). I can sympathize with businesses about Amex, as they do have high interchange fees, so I can understand why they would not accept them. Anyway, most people who have Amex have either a Visa or a MC in their wallet, so its not that big of a deal.

                                      Same thing with a gas station, I don't know why a gas station would do cash only. I even once tried paying with a credit card once at a cash only station, only to pay a few pennies more down the street (it was worth it since I get more back in rewards and it showed him cash only is not a way to do business). Also, you can't forget especially busy stations when the pumps are periodically full, it takes much less time to process a pay at the pump than to prepay and then get change with cash.

                                      1. re: caratara

                                        As a tax preparer, with several restaurateur clients, its definitely not preposterous to think that not taking credit cards is a way to fudge the tax collector. I hear it all the time, when I inform my clients that their income to expense ratio is on thin ice.

                                    2. They definitely should post somewhere that they don't take credit cards, at the very least on the menu, if not an additional sign at the door. And they absolutely should not present the check in an amex folder, what nonsense. But as far as being a crook if you accept cash only, I"m calling bs. Paying with a credit card isn't a god-given right. Credit card fees run around 2.2-2.5% of sales, I'm told, regardless of whether the entrees cost $10 or $25. Amex charges even more. That's a lot of money in a business with such a small profit margin.